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Equities

Malaysia, Singapore to establish cross-border stock trading link by year-end

KUALA LUMPUR (Nikkei Markets) -- Malaysian and Singaporean authorities Tuesday said they will jointly work to help establish a cross -border stock trading link between the two neighbors by this year-end as Southeast Asia's two wealthy nations seek to cut costs and boost efficiency in regional share trading.

The trading link will allow investors to trade and settle shares listed on each other's stock market in a more convenient and cost efficient manner, a joint statement by the Monetary Authority of Singapore and Securities Commission Malaysia said. "Retail investors notably will benefit from such a link," the authorities added.

"The 'Malaysia-Singapore Connect' will provide investors on both sides of the causeway with easier and seamless access to each other's markets with a combined market capitalization of more than $1.2 trillion and 1,600 public listed companies," Malaysia's Prime Minister Najib Razak said.

The move comes after stock exchanges of Malaysia, Indonesia, Singapore, Thailand, the Philippines, and Vietnam signed a preliminary pact in February 2009 to develop cross-border trading links as part of a drive to deepen financial connectivity across the 10-member Association of Southeast Asian Nations.

"The ease of accessibility for investors will contribute towards greater vibrancy in our markets," Securities Commission Malaysia's Chairman Ranjit Singh said. "Once operationalised, this pilot initiative can form the basis for future connectivity among ASEAN markets."

The proposed trading link will help improve liquidity at both the stock markets, Lee Boon Ngiap, assistant managing director, MAS, said.

Meanwhile, Malaysia also announced a raft of incentives for investors that include a three-year waiver on stamp-duty on small and mid-cap shares, a six-month waiver on trading and clearing fees for new investors as well as pledges to liberalize margin financing rules and allowing all investors to short sell.

"These are just some of the steps we are taking to ensure that we do indeed participate in a renaissance of capitalism and that our growth is shared by all," Najib said.

Trading of shares of stock exchange operators at both the countries - Bursa Malaysia and Singapore Exchange - are currently suspended.

-- Jason Ng

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