00:00Singapore Exchange is expanding its partnership with MSCI. It will build out new derivative
00:04products and is working to revive Singapore's IPO market. Joining us now is Singapore Exchange CEO
00:10Lo Boon Chai. Bloomberg has collaborations with SGX. Boon Chai, thank you so much for joining us.
00:16Really a pleasure to have you in here. Look, this is really exciting and it's a change.
00:19Six years ago, MSCI pulled a lot of its products over to the Hong Kong Exchange.
00:24Why did they want to work with you this time around and why open the doors and say yes to
00:27them
00:28this time around? Well, we're equally excited. It's a good partnership with MSCI. First, they never
00:34left. We continued to partner up. In fact, we grew our volumes jointly and we added new products along
00:42the way. Majority of their licenses, they did pull and move over to Hong Kong though. Maybe not all
00:46of them, but a chunk of them they did. Well, the number of licenses is one thing, number of contracts
00:51is the other. But what's important is liquidity and the debt that investors care about. And what
00:56we have with MSCI and importantly with FTSE Russell provides a very holistic suite of products for
01:02our participants accessing Asia and risk managing their exposure. When it comes to the global derivatives
01:10business, how realistic is it for SGX to maybe compete with CME, ICE and UREX? Our participants are
01:20telling us that no longer is just a case of accessing a region or more importantly risk managing a region.
01:27It is now across region, across markets, across countries, across asset classes and even across
01:32sectors. So this partnership with MSCI allows us to expand beyond just Asia. And then when we have a
01:39resilient, transparent and efficient platform, capital efficiency is very important for our participants.
01:45And most of your participants are international. I'm sure there are people watching this program
01:49right now in America who trade on SGX. How do you compete though? Because this idea of 24-hour
01:55trading has really taken off. LSE announcing a new venue. You've had NASDAQ and CBOE that are
02:02looking at expanding at 23.5. What do you do to say, okay, during the Asia session, those international
02:08traders come to us, don't go to these other sort of burgeoning 24-hour exchanges?
02:12Well, participants are going to express an opportunity of risk management through different
02:18areas, different asset classes. Our FX market is 24 hours. Our business market is almost 24 hours.
02:24Our stock market is not 24 hours, but it all really depends on what participants require.
02:29And our overnight session is now 22 percent of our overall volume. And in FX, it's almost 50 percent.
02:35So participants can trade and risk manage around the clock.
02:39So what do you think is the biggest growth driver for SGX in the coming years? Is it listings, derivatives?
02:45We're excited because we've been able to grow our business very well. I'm in a blackout period,
02:51but amongst the different asset classes, we continue to see opportunities in equity,
02:56index derivatives, in commodities, in FX, and also our stock market. And we're seeing a good listing
03:02pipeline. And many companies are preparing to list. We've seen a lot of volatility this year. Choose
03:09your market. But a lot of it has been concentrated in South Korea, for example, with SK Hynix and some
03:14of the other chip players. How has that changed behavior on your exchanges? With more uncertainty,
03:21greater volatility. We're very focused to make sure that our products, our markets, our platform continues
03:28to be very resilient. And in areas where we can be 24 hours, participants are actually using our FX
03:34markets in a great way. And we know that Singapore's IPO market has struggled. And you did mention
03:39earlier that you're maybe excited that more companies will list. Do you think that the IPO market will be
03:44making a comeback? We, by the number of IPOs, we have won our best year in the last 12 months.
03:52We are
03:53excited about the pipeline. We are 50 in the pipeline. The markets continue to be benign. We think these
04:00companies will be able to IPO in the next 12, 18 months. Well, how do you convince an Asian tech
04:05company to list on SGX when there just does seem to be companies that love to come to the more
04:11liquid
04:11market, which is the NASDAQ, for example, like a Grab or someone like that? How do you convince them
04:16to stay in the region and list on SGX when there isn't really fierce competition? Well, we have this
04:22global listing board partnership in NASDAQ. But beyond the partnership, we now have, through the efforts of
04:28the ecosystem, including the government and the regulator, 65 equity partners to anchor some of the
04:37companies. But importantly, the asset management industry has grown. And many of them are now managing
04:42greater portfolios and looking at the Singapore market as part of their portfolio. Here in the US,
04:47we're seeing fewer and fewer companies list because, I mean, even SpaceX, that's why it was such a big
04:51deal because they were already so big. They call it mega cap tech companies before they listed. Gone were
04:56the days where, you know, you become moderately sized and then you list and then you grow. What is your
05:02view
05:02when it comes to that about how the size of the companies are becoming more mature before they
05:06even list? Well, they are obviously big mega companies, but they are also mid cap companies
05:12that can continue to grow. And for some asset managers, some participants, some investors,
05:18they like to grow the companies and which is why some of these companies do very well. We have
05:22companies that are on our capitalist board that after 12, 18, 24 months, move on to our main board
05:29because they've now grown and the liquidity has improved. OK, so back to these products with MSCI.
05:34Obviously, it takes some time to actually list these things or regulations to get through.
05:39How many products are you expecting and why might we expect them to list? We hope to list a bunch
05:45of
05:45the sectors, countries between emerging markets and developed markets by the end of this year.
05:53And which products are you looking to come first?
05:57Well, we'll announce it as a time of purchase, but we'll be listing some of these by the end of
06:03this
06:03year. So end of this year. And again, I just, you know, it's always so interesting to me just how
06:08global in nature your business is. Can you sort of explain to us the mix? You mentioned a lot of
06:14people want to trade overnight. The mix of customers that you see, what the breakdown is, how many
06:18are in Singapore markets, Asia markets versus international?
06:21It's a global marketplace. We have a global platform and our customers are global. They
06:26can be trading from US, Europe, Asia, Singapore. But one good measure is our T plus one session,
06:34overnight session, and that's consistently grow over time. It's a composite market that's 22%,
06:3920%, but for a market that is 24 hours like FX, that's almost 50%.
06:44Next slide, what are we going to do with that?
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