Singapore to give HK a run for its money

Trading shares in yuan will help 'raise currency's global status'

Singapore's stock exchange plans to start listing securities denominated in the yuan as it challenges Hong Kong and Tokyo for a bigger share of equities and currency trading from the world's second-largest economy.

The move is also seen by analysts as a boost to the Chinese mainland's ambition to internationalize the yuan.

Singapore Exchange Ltd, or SGX, announced on Friday that it is ready to list, quote, trade, clear and settle securities denominated in the yuan as the city-state strives to be an offshore trading center for yuan assets.

"SGX, as the Asian gateway, is committed to being the exchange of choice for issuers with RMB fundraising needs and for investors who are keen to participate in the China growth story," SGX CEO Magnus Bocker said in a statement.

"The listing and trading of RMB securities on SGX will also extend Singapore's position as an offshore RMB center."

Issuers listing yuan securities on the exchange have the option of offering dual currency trading, either in the yuan or Singapore dollar, according to the exchange, which is the world's first exchange to offer the clearing of over-the-counter foreign exchange forwards for the yuan.

The first-ever offshore yuan IPO was conducted in Hong Kong last year, where billionaire Li Ka-shing's Hui Xian Real Estate Investment Trust raised 10.48 billion yuan ($1.65 billion). There are no yuan-denominated stocks in Singapore.

Global financial centers are scrambling for opportunities in the surging offshore trading of yuan assets, boosted by growing offshore yuan deposits accumulated in part through yuan-denominated trade settlement.