KUALA
LUMPUR: The Asean region needs a strong
leader for it to work as an economic grouping, said Aberdeen Islamic Asset
Management CEO Abdul Jalil Rasheed.
He also
said during a panel discussion at the CIMB Asean Conference that the rules
governing business activity across the 10-country zone have to be more
harmonised.
“It is
not easy. Every country in the world has an element of protectionism.
“For an
economic grouping to work, that must be removed.
“Removed
is dangerous word, it must be tweaked.
“And
there must be some sort of acceptance among the countries that this can be
done.
“We
have different countries who are at different stages.
“In
Indonesia for example, you are not allowed to have more than 15% of your net
asset value in non-Indonesian assets. If you want to sell Asean, we need to
change the rules.”
In a
move designed to raise the profile of the region’s securities to the global
investment community, the Asean Trading Link will connect seven exchanges from
six countries to establish a multinational marketplace with 3,600 companies
worth US$2 trillion in market capitalisation.
The
trading link will first connect Bursa Malaysia to the Singapore Exchange this
month, followed by a connection between Bursa Malaysia and the Stock Exchange
of Thailand (SET) in August.
It will
eventually include the stock exchanges of Hanoi, Ho Chi Minh, Indonesia and the
Philippines, providing access to an investor base of 529 million people.
Bursa
Malaysia Bhd CEO Datuk Tajuddin Atan hailed the region, which has close to 600
million people and experienced a 6% growth in gross domestic product over the
past three years, as the next sustainable growth economy.
“We
(Asean Trading Link) have latent strength.
“Among
the seven exchanges, there are 247 brokerages and close to 24,000 remisiers.
“The
Asean exchange also provides a very diversified portfolio because it has got
developed, emerging and frontier markets,” he said.
To
Aberdeen’s Abdul Jalil, Asean is “blessed with a lot of good quality
companies”.
“If
investors or fund managers look beyond the top 100 largest companies in each
exchange, there are a lot of quality companies that pay decent yields.
“We as
a firm have been marketing Asean equities for a long time and the response has
been quite good.”
In his
opening speech, CIMB Group Holdings Bhd group chief executive Datuk Seri Nazir
Razak said compared with the bleak backdrop of the United States, Europe, and
even China and India, Asean shone brightly.
“But
can our region find new levers for growth in the face of stalling external
demand? Yes we can, but we need to make concerted efforts to increase
intra-Asean activity.”
Asean,
he pointed out, has to vigorously grow trade by pursuing free trade agreements
and eliminating barriers, capitalise on the young population and strengthen its
“connectivity infrastructure”.
“In
particular, I would like to see agreement on an Asean banking framework, the
creation of a single Asean stock exchange and greater regional collaboration to
strengthen domestic currency bond markets.”
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