Roaring for change

Deepening ETF connection

"Shenzhen, a city of innovation and entrepreneurship, is at the forefront of change," says Loh.

SGX has forged a fruitful partnership with the Shenzhen Stock Exchange. The two bourses agreed to establish an exchange-traded fund program in 2021, allowing investors in both markets to access feeder ETFs linked to locally listed ETFs on each other's exchanges. This was followed by the creation of an ETF linkup between SGX and the Shanghai Stock Exchange in 2023 to deepen cross-border connectivity for issuers and investors in Singapore and on the Chinese mainland.

The China-Singapore ETF connect has seen its assets under management grow threefold in the past two years to nearly S$630 million. Nine ETFs had been launched as of April, with four having gone public on the Shenzhen bourse.

Loh sees expanding the number of ETFs on the cross-listing program as a means to make it a more compelling example of the interconnection between the two economies' capital markets. There is also much room for expansion as the combined AUM of all SGX-traded ETFs that track China-related assets now stands at S$1.3 billion, offering a glimpse of the nation's burgeoning ETF market, where nearly 50 ETFs have garnered a record S$13.8 billion in total AUM in April.

The ETF program is also a strong, well-timed response to global investors' burning desire to get hooked onto the next big story unfolding in the world's second-largest economy, making the nation's emerging industries of strategic importance readily accessible, says Loh. It also meets the untapped demand of Chinese domestic investors for wider offshore exposure.

Also seeking wider overseas markets are Chinese innovative companies that have been put on the global map with the nation's tech ascent and its quest for new quality productive forces.

Loh believes SGX has all that's required of a "launch pad" for native Chinese businesses going global. And the Greater Bay Area, which a constellation of prominent companies call home, could be the center of gravity.

The SGX chief harbors high hopes for even closer cooperation with the Shenzhen and Shanghai bourses in developing indexes, paving the way for rollouts of more ETFs based on these broad-based or sector-specific indices. Here, a similarly audacious vision is to cover some of the largest economies and biggest companies across Asia that capture the world's imagination.