ASEAN Finance Ministers have agreed the region is underperforming economically and hope that new links between the region’s stock markets will see a capital inflows and an increase in market liquidity.

The Singapore Exchange and Bursa Malaysia are in the process of setting up a cross trading system allowing much easier access to investors from both countries. In an attempt to speed up integration, this system will now extend to include Thailand and the Philippines. The plan is to go live with three exchanges on board in the second half of 2011, with the Philippines joining in the first half of 2012. Integration will also see the formation of a new ASEAN asset class with common accounting standards.

Foreign investors are generally welcoming of the news, saying it will address ASEAN’s main disadvantage: a lack of liquidity. Others caution that increased inflows could create bubbles, and mention that it will be years before less developed countries like Cambodia and Laos are able to join in.

Finance ministers from across the region are currently meeting at the 7th Annual ASEAN Finance Minister’s Investor Seminar in Kuala Lumpur.

source & article: Channel NewsAsia