Mac Murray

The ASEAN Trading Link Revolution is Coming

In INTELLIGENT Investor, PSE CURRENT Affairs on January 1, 2011 at 3:49 PM

ASEAN Trading Link countries: Singapore, Thailand, Malaysia, Indonesia, Vietnam and the Philippines

The long-awaited ASEAN Trading Link may do more to stimulate both investment in the Philippines and Filipino investing than any other current development.

According to the PSE Info Matrix a Memorandum of Understanding was signed earlier in the year between the exchanges of the Philippines, Malaysia, Singapore, Indonesia and Thailand. Within twelve months, investors based in any of these countries will be able to buy stocks on the index of any participating ASEAN exchange, just as easily as purchasing at their home exchange.

Chinese Blue Marble Button

Bloomberg’s Trading Link Affirmation

The Bloomberg ASEAN Equity Investment Roadshow, staged July 22, 2009 in Makati City, showcased experts from each Trade-Link participating ASEAN market, culminating with the Philippine economic outlook by ATR Kimeng.

Chinese Blue Marble Button

5 Point Market Stimulant
The ASEAN Trading Link may do more to stimulate both investment in the Philippines and Filipino investing than any other current development. The are at least 5 key reasons:

  1. The opportunity to buy stocks on the indices of Singapore, Malaysia, Indonesia, and Thailand means the trading universe for Philippine investors who invest only in well established companies will expand several hundred percent. In other words, we will be able to scout for and benefit from opportunities in these other markets, too.
  2. Likewise, Singaporean, Malaysian, Indonesian and Thai individual and professional investors will be able to easily explore opportunities in the PSE. Over time this may lead to dramatic and sustained increases in PSE trading volume.
  3. Local Mutual Funds will greatly benefit from this expanded universe. Either 1) local-only funds will adjust their mandates to allow their managers to take positions throughout the ASEAN arena , or 2) new ASEAN oriented mutual funds will be launched and promoted to the investing public.
  4. Hedge Funds: I hate to say it, but a PSE-only hedge fund is almost a laughable proposition. However, the ASEAN trading link will encourage the formation of “regional funds”, that is, Filipino-managed hedge funds that carve out niches throughout the ASEAN exchanges. In other words, aspiring Filipino hedge-fund managers will have an opportunity to demonstrate their capabilities on the international stage.
  5. All of the aforementioned will bring much needed currency into the Philippines and, to the extent the “trickle down theory” is true, will bring the nation one step closer to First World status.

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ASEAN Signs Trading Link

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E. M. Murray.  Customized Stock Portfolios.  Professional Management.  Fixed Downside Risk.

E. M. Murray. Customized Stock Portfolios. Professional Management. Fixed Downside Risk.

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