PSE, Bank of China tie up to attract Chinese investors

MANILA, Philippines — The Philippine Stock Exchange, operator of the local bourse, has partnered with the Bank of China for a collaboration that will improve ties between the PSE and three stock exchanges in China.

The partnership will enable the local bourse to capture more foreign stock market investors.

PSE president and CEO Ramon Monzon said the stock connect program is vital as it would enhance liquidity in the market.

“We welcome this strategic partnership and we look forward to working with Bank of China-Manila. This collaboration can potentially fast-track the stock connect initiative between the PSE and the three stock exchanges in China. The stock connect program is vital to PSE since this will open our stock market to more foreign investors and enhance liquidity in the stock market,” Monzon said.

 Stock connect refers to a mutual market access program.

Toward this end, the PSE and Bank of China (Hong Kong) Ltd. – Manila Branch (BOCMNL) inked a memorandum of understanding (MOU) to provide financial services in support of bilateral investment and trade through capital market linkages between the Philippines and China.

Among the salient points covered by the MOU are the creation of a working group from both parties to explore areas of cooperation and exchange of information on settlement infrastructure and building the same for account opening, foreign exchange and cross-border settlement.

As part of the MOU, BOCMNL will provide the financial infrastructure to support the settlement of trading between the Philippine and Chinese exchanges, as well as provide direct Peso-RMB conversion required for the settlements.

Deng Jun, country head of Bank of China Manila said the financial services BOCMNL would provide to the PSE, its brokers and other stakeholders would add to the bank’s mission of facilitating bilateral trade and investments between China and the Philippines.

“We look forward to working with the PSE and other financial institutions to explore further cooperation of both countries through bond issuance, stock exchange, and capital market trading, which may be another important step in the currency diversification of the local capital market,” he said.

The MOU will also cover other areas for cooperation such as the provision of banking services by BOCMNL for the PSE and its stakeholders, specifically listed companies and trading participants.