Lim Hng Kiang: The Tokyo Stock Exchange and Singapore
Speech by Mr Lim Hng Kiang, Deputy Chairman of the Monetary Authority of Singapore and Minister
for Trade and Industry, at the Tokyo Stock Exchange Singapore Representative Office 10th
Anniversary, Singapore, 14 December 2006.
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Congratulatory remarks
I am delighted to be here with you this evening to celebrate the 10th anniversary of Tokyo Stock
Exchange Singapore Representative Office. Firstly, I would like to thank the Tokyo Stock Exchange for
its commitment to Singapore and the region over the past decade and I hope Tokyo Stock Exchange
will continue to scale greater heights in coming years.
Growth of Asia and Japan
When Tokyo Stock Exchange established its overseas office in Singapore in 1996, Singapore and the
region were experiencing strong economic growth with Asian economies developing at rates of about
5 to 10% per year. Today, we continue to witness the rise of Asia on the back of the twin drivers of
China and India. Prospects for South-East Asia have improved considerably and Japan, after years of
stagnation, is firmly back on the track of healthy sustained growth and is a major investor in
South-East Asia. As of 2005, Japan's FDI into South-East Asia totaled $38 billion, and it is the top
investor in Indonesia, and the third largest investor in Vietnam.
Changes in the global exchange landscape
The competitive landscape in the global exchange arena has also changed significantly. Equity and
derivatives exchanges are consolidating globally in the bid to establish greater market share and to
expand product offerings. The New York Stock Exchange-EURONEXT cross-Atlantic merger to create
the first multi-time-zone exchange, and the recently announced merger between the Chicago Board of
Trade and the Chicago Mercantile Exchange could lead to more centralized liquidity pool for
derivatives trading in the US and Europe.
Asian exchanges can do more - TSE can take greater leading role
The consolidation trend has yet to reach Asia and Asian exchanges may face the risk of
marginalisation. In order to remain relevant, the Asian exchanges may need to explore ways to
deepen collaboration and product differentiation in the face of strong competition.
In Asia, the Tokyo Stock Exchange is the largest stock exchange by market capitalization. Since its
establishment in 1878, it has grown to be the 2nd largest bourse globally, with a market capitalization
of its listed companies exceeding US$4 trillion, second only to the New York Stock Exchange. It also
registers high average daily trading volume for domestic equities of about US$19 billion for 2005.
I understand that the Tokyo Stock Exchange is currently in talks with major exchanges about alliances
and I am heartened to hear its efforts to work more closely with the Asian exchanges. For example,
the Tokyo Stock Exchange and the Singapore Exchange have been discussing about such strategic
cooperation which would benefit both markets and their investors, including the possible trading
linkage, and I urge both parties to work together more closely.
We need to cultivate and foster greater bilateral, if not, multilateral cross-border relationships with
each other to develop greater liquidity in regional securities and derivatives markets. The current
economic growth in Japan, Singapore, as well as in the broader South-East Asian region, gives us a
window of opportunity to act swiftly to deepen and enhance trading linkages so as to strengthen Asia's
competitive edge. Together, I believe we can present an attractive value proposition to global investors
who are looking to Asia for growth.
Conclusion
On that note, let me extend my heartiest congratulations to the Tokyo Stock Exchange on its
Singapore Representative Office 10th anniversary celebration. The Tokyo Stock Exchange and
Singapore have enjoyed an excellent relationship over the years and I do treasure the very important
ties and partnerships between Japan and Singapore. I certainly look forward to many more years of
close and fruitful cooperation between the 2 countries in future projects.
I wish Tokyo Stock Exchange great success in their endeavours. Thank you.