Following is the transcript of a CNBC interview with Loh Boon Chye, CEO, SGX. The interview was broadcast on CNBC on 24 April 2017, during CNBC's "Hong Kong versus Singapore" theme week.
All references must be sourced to a "CNBC Interview'.
Interviewed by Sri Jegarajah, Senior Correspondent, CNBC.
Loh Boon Chye: We were Asia's first of offshore exchange in terms of derivatives. We were also the first to introduce dynamic circuit breaker. So being international has always been our hallmark. Having a hinterland or regional surrounding countries is always a good angle. So we continue on our international path.
Sri Jegarajah: And where Singapore arguably falls short is as a capital raising center. Hong Kong seems to have the edge in that regard. But do you think things are going to change now that you formed this partnership with Shanghai Pudong Development bank?
Loh: We always looked out for collaboration. And with China, we have many MOUs with banks, security houses and will continue to do that. But remember that Singapore and also the SGX is the most international exchange. More than 40 percent of our listed companies come from outside of Singapore.
Sri: In terms of this region, as it appears to me, the SGX seems to be playing to its strengths and forming relationships in the ASEAN region as opposed to trying to be a gateway for China as Hong Kong is. Is that the preferred strategy?
Loh: Well, being right in the heart of ASEAN and with ASEAN within our proximity that serves as a good base, a good angle. The MOUs and collaboration that we have with Chinese partners can continue to attract even some of the Chinese financial institutions here, is a strategy for us to anchor more China into Singapore.
Sri: And there seems to be progress made here on dual class listings, you seem to be ahead. Hong Kong is now considering a similar sort of a structure. You floated the idea to markets, I know it's still early days, but can you give us an idea, Boon Chye of whether there is consensus forming for this idea.
Loh: Well dual class is just one of the capital structures for companies to raise funding. It's important as a dynamic and a progressive exchange that we have various structures to allow dynamic fast growing companies to raise funding. It's still early days for us to comment on what comes out of the consultation.
Sri: But really the bigger picture strategy here is that if you do successfully manage to incorporate the dual class structure at the SGX. You'd hope to attract higher profile, bigger ticket IPOs, yes?
Loh: We have many large global companies already listed here in Singapore. And dual class is just one of the many capital structures that can help fostering growing dynamic companies to raise funding.
Sri: And the final question, Boon Chye, is about the rise of fintech and, if I can add to that, alternative trading platforms. Do you view this as a threat or an opportunity?
Loh: Fintech is an enabler and I think we need to embrace technology as long as they help the overall ecosystem. We have worked on a proof of concept on using blockchain for bond settlement and that will prove to be, I think, beneficial for the overall marketplace.