PSE eyes cross border listing deal with Asean bourses this year

The Philippine Stock Exchange (PSE) expects to ink an agreement with five other Southeast Asian bourses on cross-border listing of securities trading by the end of the year. 

PSE chief executive officer Francis Lim said the neighboring bourses are also in the process of finalizing the terms of their memorandum of agreement.

The PSE, Singapore Stock Exchange, the Stock Exchange of Thailand, Indonesia Stock Exchange, Bursa Malaysia and Ho Chi Minh Stock Exchange earlier agreed in principle to link up and put up a regional trading board to boost liquidity and attract more investments.

Cross border listing is the trend of multiple listing of companies across different markets in the world.

Cross-border listing will allow investors to trade the shares of a foreign firm.

The PSE is reviewing its rules to make them more conducive to cross-border listing.

The structure of global equity markets has changed considerably over the past few decades as technological progress and the liberalization of capital flows have lowered the barriers that insulated national markets from each other. However, while investors can now access foreign capital markets more easily, geography has not become irrelevant.

Obstacles to international capital flows, such as legal restrictions on capital mobility and foreign ownership, the costs associated with trading and acquiring information on firms listed abroad, and concerns over investor protection in certain foreign jurisdictions, still exist. The segmentation of markets that results from these barriers is creating incentives for corporate managers to adopt financial policies such as international cross-listing, whereby a firm lists its shares for trading on at least two stock exchanges located in different countries.