SGX and Shenzhen Stock Exchange enter deal to set up ETF link

SGX building on Shenton Way in SingaporeSGX building on Shenton Way in Singapore

Singapore Exchange (SGX) and the Shenzhen Stock Exchange (SZSE) have entered a memorandum of understanding (MOU) to set up a link for exchange-traded funds (ETFs) to provide both exchanges’ investors more options, SGX said in a filing Tuesday.

Under the deal, SGX and SZSE will jointly develop and promote ETF markets in Singapore and China by listing feeder ETFs, which link locally listed ETFs to ones listed on the other exchange, the filing said.

That would allow domestic ETF issuers to access cross-border capital flows, and investors to access overseas-listed ETFs via their domestic exchanges, the filing said.

“The strong demand for ETFs in Asia underscores the region’s growing role as a global ETF hub and we are excited about the manifold opportunities that this partnership could bring. This also marks our commitment in supporting China’s internationalisation efforts,” Loh Boon Chye, CEO of SGX, said in the statement.

“We look forward to working closely with onshore exchanges in strengthening the ETF markets in Singapore and China, and to more regional collaborations,” Loh added.

At end-November, Singapore-listed ETFs topped S$12 billion in assets, up nearly 50 percent on-year, SGX said.

SGX has 30 ETFs across asset classes, including the world’s largest Chinese pure government bond ETF, issued by CSOP Asset Management, the filing said.

SZSE has 212 ETFs listed, with an aggregate market capitalization of US$39 billion, the filing said.