Singapore Exchange to Start Dual-Currency Trades in April

Singapore Exchange Ltd. (SGX) will allow securities, including stocks and exchange-traded funds, to be listed in dual currencies starting next month.

Companies and ETF providers will be able to choose a combination from among the currencies of Singapore, Hong Kong, Australia and the U.S, SGX spokeswoman Loh Wei Ling told Bloomberg News via e-mail today. Investors will be able to buy and sell the security in either currency, with all units held in the same depository pool, the exchange said.

Dual-currency listings mean investors will no longer have to use brokers’ foreign exchange rate at the time of settlement, according to the SGX website. The risk is that price disparities could arise for a security if there is a large imbalance between transactions in different currencies, it said.

“We think it’s an excellent idea,” Luke Randell, managing director for Citi Global Markets in Asia Pacific told Bloomberg today by e-mail. “It will open up global equity markets without the currency risk.”

Hutchison Port Holdings Trust (HPHT) will be the first company to list on the bourse in two currencies, according to the statement. The port operator’s stock will trade in U.S. and Singapore dollars starting April 2, it said.

“This is a start and we will explore offering other currencies when it’s appropriate or if the need arises,” the exchange’s Loh said.

Corporate actions including dividends will be given in the primary currency of the listing, according to the exchange’s website. The company will also have the option of changing the primary currency.

To contact the reporter on this story: Eleni Himaras in Hong Kong at ehimaras@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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