.jpg)
1. Distinguished guests, ladies and gentlemen, a very good morning to you.
2. Many thanks to CGS-CIMB for inviting me to speak today.
3. With the pandemic behind us, today’s gathering of government and business leaders from across China and ASEAN shows we are all focused on the next phase of growth ahead of us.
RCEP fueling financial connectivity between China and ASEAN
4. Southeast Asia is on-track to becoming the world’s fourth-largest economy by 2030. It is therefore no surprise that companies will continue to diversify their businesses into the region.
5. This trend has become more pronounced with the implementation of RCEP (Regional Comprehensive Economic Partnership), the world’s largest free trade agreement, in 2022.
6. Covering around 30% of the world's GDP and population, RCEP is a significant development that will broaden and deepen the economic linkages and connectivity amongst its participating countries, opening up new opportunities.
7. The signing of the RCEP amidst the COVID-19 pandemic speaks to the importance that the participating countries are placing on regional economic integration and development.
8. Singapore, in particular, is a favoured destination for firms looking to enter this growing region. Global tech companies have set their regional headquarters in Singapore; capital-intensive expansion projects are anchoring in Singapore; Chinese and Southeast Asian enterprises are also coming to Singapore, seeking a springboard to expand into the region.
Capital-raising demand by businesses expanding into this region
9. Against this backdrop, we are seeing an increased demand for growth capital, which SGX Group is well-positioned to support.
10. Today, 40% of our listed companies by market capitalisation are overseas companies, attracted by the access to international capital in a pro-business and well-regulated environment. They also gain enhanced visibility and international profile from a public listing in Singapore.
11. Among the international companies listed on our exchange, 35% come from Greater China, and another 30% come from Southeast Asia. These companies are from diverse sectors, across property, clean energy, healthcare, technology, entertainment and manufacturing.
12. Our international platform and connectivity play a key role in the growth and capital structure needs of fast-growing Chinese and Southeast Asian companies. Across the region, we are seeing increased inquiries and interest from companies for not just a primary listing, but also a secondary listing, as they expand beyond their home grounds.
13. Companies such as Chinese electric vehicle maker NIO, and Emperador, a leading global spirits company from the Philippines have benefitted from our secondary listings framework to broaden their access to capital and reach in this region.
SGX Group’s bond offering
14. Beyond a company listing, we are also seeing a trend in companies issuing bonds, including green bonds, on our platform, as they grow their business and align their business objective with sustainability goals.
15. Today, 15% of bond issuers on SGX come from Greater China. With the further opening up of China's bond markets to global investors – the second largest bond market in the world – there will no doubt be more room for collaboration between SGX and China.
16. Back in 2020, SGX signed a wide-ranging agreement with China Central Depository & Clearing Co, or CCDC, to strengthen and promote Singapore and China’s bond markets. This is CCDC’s first comprehensive MOU of strategic cooperation with an international exchange, that covers the full lifecycle from issuance to settlement and custody.
17. Since then, SGX has welcomed the listing of onshore RMB bonds on our exchange, as well as the listing of “Pearl Bonds” or Shanghai free trade zone bonds by Chinese issuers. These Pearl Bonds are cleared via CCDC and can be subscribed by investors in the Free Trade Zone and by offshore investors.
18. With investors and companies increasingly paying attention to sustainability, we are also seeing strong demand for green, social, sustainability and sustainability-linked (GSSS) bonds. Today, more than 50% of listed APAC G3 currency GSSS bonds are listed on SGX, making us the leading venue for such bond listings.
19. At the same time, there continues to be a growing demand from investors to access opportunities in China’s onshore bond markets. This led to the listing of the world’s largest Chinese pure government bond ETF issued by CSOP Asset Management on SGX.
20. We believe there are many more opportunities for SGX to play an active role in the internationalisation of China’s bond markets, especially as China increases its pace in green finance.
Strengthening regional connectivity
21. In-line with the spirit of RCEP, I see huge potential for exchanges in the region to collaborate and enhance financial linkages, and this is something that we have been actively working on.
22. An example is the depository receipts linkage between SGX and the Stock Exchange of Thailand, the first exchange-level DR cooperation in ASEAN, which is expected to go live this year. This sets a blueprint for future regional collaboration between exchanges to harness each other’s capabilities, and bring about greater connectivity across borders and asset classes.
23. Similarly, the ETF Link between Shenzhen Stock Exchange and SGX went live in December last year, paving the way for investors in China and Singapore to access ETFs in each other’s markets. The strong reception in China showcases Chinese investors’ appetite for ASEAN. We hope to grow this link to include more ETFs across different investment themes such as ESG and regional equities to cater to global investors.
24. SGX welcomes initiatives to foster greater collaboration and see ourselves as a natural partner to the China-ASEAN collaboration journey.
25. The economic partnership between China and ASEAN has been mutually beneficial. I look forward to partnering with like-minded businesses and stakeholders as we work together to create sustainable, growth opportunities for all. Thank you.
