Hong Kong Exchanges and Clearing Ltd is the holding company for the city’s stock exchange, futures exchange and clearing company. Its market capitalisation made it the world’s biggest listed bourse as of the end of 2012. In December 2012, the HKEx clinched the US$2.2 billion takeover of the London Metal Exchange, the world's biggest marketplace for industrial metals.
SGX takes first step on link-up with HKEx
The Singapore Exchange yesterday opened an office in Hong Kong and linked up with the local exchange's data centre to make it easier for investors in the city to trade its derivatives products.
This is the first step for the SGX to tie up with Hong Kong Exchanges and Clearing since the two former rivals became partners in December last year when they signed a memorandum of understanding on cooperation.
HKEx chief executive Charles Li Xiaojia said yesterday the two exchanges "will continue to explore ways we can cooperate in areas of common interest".
"This is the first step of our cooperation and we expect we will have more collaboration," Chew Sutat, the SGX's executive vice-president and head of sales and clients, told the South China Morning Post.
Cooperation may include HKEx linking up with the SGX data centre for easier cross-trading by investors in both markets.
The two exchanges would also work on the launch of more yuan products, Chew said.
The Singapore exchange's liquidity hub at the HKEx data centre will allow Hong Kong brokers to have direct electronic access to Singapore-based brokers who are members of the SGX. This means Hong Kong investors can trade Singapore products in a matter of seconds instead of several minutes using the telephone.
Chew said five brokerage firms in Hong Kong had signed up to connect to the liquidity hub. The five are CSC Futures (HK), Direct Access International Futures, Frontier Research & Technology, Kim Eng Futures (Hong Kong) and Marigold International Securities. Chew hopes 450 more local brokers will also join it.
Ringo Chiu is the chief representative of the Singapore exchange's Hong Kong branch. Its local office only has a licence in derivative trading so it will not compete with HKEx on new listings.
The SGX has a number of equity futures products, including those tracking the indices in Taiwan, Japan, Indonesia and China's shares.
Chew said that when HKEx linked up with the Shanghai stock exchange for cross-border trading in October, it might encourage investors to use SGX derivative products to hedge risks.
The SGX will introduce yuan futures this year. HKEx already has those products since last year. "The launch of yuan futures at the SGX will encourage more investors to trade the yuan products. This will make the business pie bigger," Chew said.
Hong Kong ranks sixth in the world and Singapore 20th by market capitalisation. The city state is challenging Hong Kong's role as the leading offshore yuan centre.