Singapore Exchange (SGX) today entered into a Memorandum of Deepening Cooperation (Memorandum) with Chongqing Municipal Financial Regulatory Bureau (Chongqing Bureau, formerly known as Chongqing Financial Affairs Office or Chongqing FAO) that strengthens joint efforts to encourage capital flows and enterprise fundraising.
Under the Memorandum, both parties will work together to promote capital flows from Chongqing’s qualified domestic investors into Singapore’s capital markets, as well as explore fundraising opportunities in Singapore for enterprises from central and western China, including those from Chongqing.
SGX and Chongqing FAO inked a memorandum of understanding in May 2010. Since then, Chongqing companies have gained significant awareness of the Singapore capital markets. SGX welcomed its first real estate investment trust from a Chongqing-based sponsor in 2018 and also saw a Chongqing-based state-owned enterprise issue the first SGD-denominated credit-enhanced bond earlier this year.
This latest Memorandum follows the strategic cooperation agreement that SGX and the China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity (CCI) Administrative Bureau entered in January this year, aimed at facilitating access to innovative cross-border financial services and catalysing business opportunities for enterprises from Western China.
Chew Sutat, Senior Managing Director and Head of Global Sales and Origination, SGX, said, “The signing of this Memorandum dovetails with the goals of CCI, the China-Singapore government-to-government project that endeavours to spur the economic growth of Western China. In addition to offering Chongqing enterprises access to international capital, SGX is also an ideal springboard into ASEAN as these companies continue to tap growth opportunities beyond China.”
At present, Greater China companies account for about 20% of the market capitalisation of companies listed in Singapore. As the international bond centre of Asia, about 15% of bond issuers on SGX are from Greater China.
As one of the leading clearing houses globally accepting offshore RMB for margin collaterals, clearing and settlement, SGX’s equity index, currency and commodity derivatives are also effective key risk management tools for international market participants investing in China.