Southeast Asia stock exchanges push connectivity

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The six major exchanges in Southeast Asia are joining hands to pursue regional market connectivity and drive sustainability in the region.

Heads of the six major exchanges in ASEAN recently discussed initiatives targeted to make the region more competitive, particularly by focusing on the sustainability ecosystem and regional market connectivity.

Included in the meeting were CEOs/presidents from Bursa Malaysia, Indonesia Stock Exchange (IDX), The Philippine Stock Exchange (PSE), Singapore Exchange (SGX Group), The Stock Exchange of Thailand (SET) as well as the deputy CEO of Vietnam Exchange.

The ASEAN Exchange leaders agreed to jointly pursue the collaboration to offer depository receipts in their respective exchanges, expanding access for domestic investors to investment opportunities in neighboring countries.

The PSE became the latest addition to the ASEAN-Interconnected Sustainability Ecosystem (ASEAN-ISE) initiative, which started with a memorandum of understanding among Bursa Malaysia, IDX and SET.

It has since expanded to include SGX Group last February and the PSE this month.

'Sustainability is a collective endeavor and we believe ASEAN-ISE provides us an opportunity to contribute to the development and implementation of ESG initiatives in the region,' PSE president and CEO Ramon Monzon said, referring to environmental, social and governance metrics. 'We are excited to collaborate with our peer exchanges in creating programs that will elevate the level of sustainability in ASEAN markets.'

The ASEAN-ISE underscores the bloc's commitment in adopting and implementing common ESG metrics within their respective data infrastructure.

This is seen significantly improving transparency, comparability and exemplary ESG practices across the region.

'The inclusion of PSE in ASEAN-ISE signifies ASEAN Exchange members' steadfast commitment to sustainable development as a unified market,' Bursa Malaysia CEO Datuk Muhamad Umar Swift said.

The past year saw growing momentum on the sustainability front, with increased information sharing among ASEAN exchanges and observers as well as the adoption of common ESG metrics.

Peer exchanges have given their respective inputs to an ESG landscape survey to prioritize future ESG initiatives to be undertaken by the exchanges.

Over the next three years, the ASEAN Exchanges' CEOs have agreed to pursue four proof-of-concepts that include establishing an ASEAN data infrastructure, capacity building for listed issuers, transition financing for corporates' suppliers and ASEAN ESG awards.

'The agreed-upon proof-of-concepts focus our collective energy and resources on exploring and deploying workable models in targeted strategic areas. These areas aim to elevate competitiveness by developing common data infrastructure, enhancing capacity building capabilities through economies of scale, and building an interconnected marketplace to facilitate transition financing and capital deployment into businesses with superior ESG practices,' Muhamad Umar said.

'We envisage a three-year glide-path and are open to exploring commercially viable business models or fit-for-purpose partnerships to accelerate this journey,' he said.