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1. Ms Jaqueline Loh, Deputy Managing Director, Markets and Development at the Monetary Authority of Singapore;
Fellow WFE Members;
Guests; media and industry friends, a very good morning to all of you.
2. Once again, it is my pleasure to welcome you to the 59th World Federation of Exchanges Annual Meeting. For those of you who were at SGX last night for our welcome reception, I hope you had a good night’s rest. It is going to be two full days of discussions ahead of us and I am excited to start things off.
3. It is remarkable to have so many industry leaders and decision makers come together from around the world – all of us part of this financial ecosystem that powers economies and empowers societies globally.
4. We are convening at an interesting time, when opportunities created by technology and internationalisation are also paired with disruption, market volatility and geopolitical risks. This new world we live in calls for exchanges to work together and create solutions that will help chart the way forward.
Asia as the key engine for global growth
5. One thing that we are certain is that Asia will continue to lead global growth in the near future. Singapore, as a global financial and trade centre, is a key facilitator of this growth. SGX, too, connects Asia and the world, providing access to 99% of Asia’s GDP.
6. With Asia as the growth engine for the global economy, against a persistently low interest rate environment, investors are seeking incremental returns and would no doubt turn to Asia. At the same time, businesses in Asia also need to seek international capital to support their growth.
7. To capitalise on the opportunities before us, exchanges can take a leaf from the airline industry. Airlines have formed alliances which are multilateral in nature, enhance their footprint and allow them to better serve their customers. Code-sharing, for example, leads to increased revenue when more seats are filled, more efficient use of resources, and perhaps even less competition. From a customer standpoint, there are more options and flexibility.
8. Similarly, exchanges should look to achieve sustainable growth through strategic partnerships and collaborations. By working together, we can spawn creative ideas, encourage greater investment activity and elevate the overall quality of the markets. The benefits of partnerships far outweigh competition.
9. Given the diversity of Asia as a region, exchanges should work together to form alliances and enable greater connectivity between markets and participants. I would like to set out three suggestions on incremental steps which exchanges can make.
Data distribution, financing for companies, investment research
10. First – data distribution. Passive investing, which has grown significantly, is an important avenue for channeling investments into a market. To tap the massive investment flows into Asia, the region can collectively create indices, share data and promote understanding of each other’s markets. By working together on this front, we can put our individual markets on the radars of investors from around the world.
11. Second – how can we, as a group of global exchanges, help fast-growing and private companies to access financing and a greater pool of liquidity? How can we promote our respective homegrown companies to a broader range of investors? As capital becomes increasingly borderless, companies can benefit from a wider pool of liquidity in both private and public markets. As exchanges, we can certainly do more to create linkages for the benefit of investors and our companies.
12. Last but not least, investment research. Access to research is critical for price formation in capital markets. Big-caps and index stocks will always enjoy significant research coverage, but many financial institutions and securities houses have pared back research coverage for some of the smaller stocks in reaction to MiFID II. Imagine what we can achieve if exchanges join hands to jointly promote research coverage of small and medium enterprises.
A common vision
13. This morning, we have over 300 representatives of the global financial network, coming together from 60 countries, speaking numerous different languages. Through the WFE we have a platform to foster a common vision and to speak a language we all understand. And this language centres on sustainability.
14. The WFE has articulated a vision of a sustainable financial system – one that is stable and creates value, and serves the long-term needs of a sustainable and inclusive economy. To this end, the WFE has taken the lead by launching Five Sustainability Principles last year.
15. I want to applaud the WFE on their efforts, as well as everyone here today who is taking significant steps towards these goals. These five principles have resulted in a range of initiatives, policies and global programmes that, collectively, is gaining momentum at a faster rate than before.
16. With every individual initiative, we are creating a ripple effect that is greater than the impact of a single act. As you walked into the venue this morning, I hope you had the chance to notice our Sustainability Wall. Over the next two days we invite everyone to share the efforts you are making towards creating these ripples. We hope that by expressing our commitments and efforts, we can create a greater momentum to truly build a successful sustainable future.
17. Building a secure, stable and sustainable financial ecosystem is everyone’s responsibility. By combining our knowledge, insight and learnings, we will be able to better facilitate the exchange of capital and ideas to create value for people, businesses and economies. And this is SGX’s purpose.
18. Thank you and I hope you enjoy an insightful and inspiring two days. Thank you for being in Singapore, for visiting SGX, and for being part of our 20th anniversary celebrations.
