SGX yesterday announced that it had signed a memorandum of understanding with the Bank of China to develop RMB products and services and expand the exchange business in China as well as helping the Chinese to expand their products in Singapore.
Singapore is a small country and it is tough for SGX to grow its securities and derivatives business in the region. Given the largest population country like China, SGX is able to leverage on the population numbers to better grow its business.
Furthermore, companies in China still lack good corporate governance and locals seeked to park their cash elsewhere. SGX, as Geoff Howie, market strategist at SGX, explains that SGX remains one of the most diversified exchange in the world perfectly caters for the people in China, who are in search of companies with better corporate governance and good returns on investments.
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