Singapore Exchange strikes deal with GF Securities to boost China capital flows

August 31, 2020.

will work with Chinese broker GF Securities to promote cross-border trade in foreign exchange futures, commodity derivatives, real estate investment trusts and other investment products.

The exchange said Monday that it signed a memorandum of understanding with GF Securities outlining the companies’ plans to boost trading volumes between China and Singapore by marketing SGX-listed products and broadening GF Securities’ access to the exchange.

The agreement will take advantage of the companies’ preexisting relationship to facilitate cross-border trading by marketing to institutional investors in both countries, according to the exchange.

Under the companies’ new partnership, GF Securities will boost access to Singapore Exchange offerings by expanding its current SGX-listed derivatives distribution through GF Futures, a subsidiary that has been trading derivatives such as renminbi futures on the exchange since 2011. The broker will also market SGX-listed real estate investment trusts and fixed income products to its institutional clients.

GF Securities’ Hong Kong subsidiary will apply for trading membership on the exchange in order to offer its customers online brokerage services for SGX-listed securities, the exchange said.

The deal was revealed at an annual meeting between representatives of Singapore and China’s Guangdong province. Officials said the parties would work together to strengthen their economic ties, which in 2019 yielded $19 billion in bilateral trade. Singapore and Guangdong exchanged about $8 billion in trade through the first half of 2020, according to The Business Times.

Singapore Exchange CEO Loh Boon Chye said Monday’s agreement would benefit GF Securities’ clients as they navigate changing markets.

“As investors increasingly adopt multi-asset strategies to achieve their investment objectives in the current low interest rate environment, this collaboration … paves the way for [GF Securities’] clients to access the wide range of investment products and opportunities offered by” Singapore Exchange, Loh said.

GF Securities executives said Monday’s deal deepens 30 years of financial cooperation between Chinese and Singaporean institutions.

The agreement “marks a new step in our internationalization efforts,” said Sun Shuming, chairman of GF Securities. “Stronger financial connectivity between China and Singapore not only enables Chinese enterprises and investors branching out overseas, but also introduces [renminbi] assets to global investors.”