Shanghai Singapore Connect – An Impossible Dream

The success of the Shanghai Hong Kong Connect has been making many people here salivating. Why are their markets so active and bullish while the touted as the most progressive and advanced SGX is still in ICU? No doubt the exuberance in Shanghai/Hong Kong exchanges is having a spillover effect on the otherwise dead but artificially boosted computer infested market and giving it a semblance of life. But do not believe much in it as the bulk of the trading is done by computers, not real participation from real investors.

With the surge in prices and volumes in both Shanghai and Hong Kong, some are questioning why the SGX would not do a Singapore Shanghai Connect and bring some life back to the market. It is wishful thinking for many reasons but most important is the philosophy behind Shanghai and Hong Kong exchanges. The Chinese are promoting Shanghai and Hong Kong as the alternative trading model to the excessively manipulated American modeled exchanges that are dominated by computer trading, cheating on the innocent investors and the fund managers.

China would not allow such unfair practices to operate in the Shanghai Hong Kong exchanges. No way. How then could SGX dream of a connect with Shanghai and Hong Kong to form a holy trinity when one is obviously looking ungodly?

Actually SGX should have no fear as it is the best exchange in the region with all the best practices and hi speed computers and the most advanced trading concepts in the system. There is no need to be envious of the Shanghai Hong Kong Connect. Soon Shanghai and Hong Kong would fail and would adopt the same practices like the SGX. That is the only way to go forward. Everything is so fine in the SGX. And with the new reputation as a Mickey Mouse stock exchange inundated with penny and penniless stocks, with tiny bid sizes, smaller lot sizes, the market is idea for all ages. Children can also afford to buy stocks with their pocket money. It is so liquid and so cheap to play in this Mickey Mouse stock market, not much more expensive than playing Monopoly.

And with children participating in the market, as proxies since they cannot trade directly, the de facto number of investors could easily doubled or tripled, to give the added trading volume or if not, the number of investors that can be theoretically playing the market.

The Shanghai Hong Kong stock markets are incompatible to the SGX as the value of their stocks are too expensive, the bit size and the lot size are also too big and expensive for children to play. They are playing in a different league, adults only. And how can they allow a connect to a system that uses computers to trade against the innocent and ignorant investors to take advantage of them with their computer power? No way. Unfair trading is unfair trading.

The Chinese would go their own way, do their own things. The SGX would be happy with its Mickey Mouse status and image and targeting a different clientele, investors that can only afford to play super penny stocks.

A Singapore Shanghai Connect under the present arrangement and operating platforms is simply no go. The only way to operate a sustainable and sophisticated stock market is the SGX way. The Shanghai Hong Kong model will not work, for long if the foreign funds would have their ways, to force them to be more like the SGX or the New York Exchange.


Anonymous said...

For fucks sake, it's BID not BIT.

Chua Chin Leng aka redbean said...

Ok, ok no need to get angry. Amended. Thank you. Is your name Vincent?

Anonymous said...

RB, think you guess right. His name is Vincent or his friend's name is Vincent. See he not happy.

Anonymous said...

Is the SGX an example of the LKY-PAP operating model breaking down?
Can we say other examples might be:
Youth Olympic Games?

What are other possible examples of the breakdown of the LKY-PAP operating model?

b said...

China is fast taking over the title switerland of the east from sg. China will have a financial market much better than us and uk combine. Sg will reduce to nothing but a resort island in years to come.