SGX and SET introduce Thailand-Singapore depository receipt tie-up

Stock ticker at SGX building on Shenton Way; taken October 2018.Stock ticker at SGX building.

Singapore Exchange (SGX) and The Stock Exchange of Thailand (SET) have launched a tie-up to allow depository receipts (DR) representing shares in SGX-listed securities to trade on SET and vice versa, marking an advancement in Southeast Asian securities market cooperation, the companies said in a statement Wednesday.

The deal marks the first exchange-level DR cooperation in Southeast Asia, in a move that will provide investors ease of access for securities listed on either exchange, SGX and SET said in the statement.

“This collaboration meets rising demand from market participants in both countries for more choice in their investments, playing to the respective sectoral strengths such as Real Estate Investment Trusts (REITs) in Singapore as well as fast-growing companies in Thailand,” SGX and SET said. “It leverages on existing market infrastructure and ecosystems to achieve greater connectivity between the two markets.”

The first DR is expected to be introduced in the next 12 months, the statement said, noting investors will be able to use their usual brokerage arrangements and their domestic currencies.

Loh Boon Chye, CEO of SGX, said: “We have been partners with the SET for many years and the Thailand-Singapore DR Linkage will enable us to build scale together and set a blueprint for future regional collaboration. It raises Asean’s profile and offers investors enhanced access with unmatched efficiency. By harnessing each other’s capabilities, we can bring greater connectivity not only across borders but across multiple asset classes.”

Pakorn Peetathawatchai, president of SET, said: “The Thailand-Singapore DR Linkage not only enables investors to conveniently diversify their portfolio at home country, but also improves price efficiency by linking the liquidity of the two premier Asean markets. The collaboration is aligned with SET’s key strategy to venture new frontiers: adding products with international exposure to widen business opportunities while offering new investment alternatives to investors.”