Boon Chye Loh: Opening the market

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By:
Chris Wright
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As part of Euromoney's 50th anniversary coverage, we profile some of the biggest names that we interviewed for our May Asia focus.

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Boon Chye Loh has been chief executive of the Singapore Exchange (SGX) since 2015, and before that had a storied career in investment banking. At Deutsche Bank he built the global markets business in Asia that at times accounted for half the bank’s profits in the region.

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Boon Chye Loh, Singapore Exchange

Today his preoccupation is making SGX work at a time when new listings are few and far between, and equity trading is moribund. His contention is that there is more to life than shares.

“The journey we carried out in the last few years was to cement the exchange further as a multi-asset exchange,” he says. “We want to offer investors access to Asia and to different asset classes.”

He has found greater momentum in areas where there is already an ecosystem in Singapore, such as global commodities and anything related to freight.

“Where we have a hub of some kind, the traction and momentum has clearly been better,” he says. Likewise currencies: the FX business has grown rapidly in the last two years and renminbi futures have reached critical mass. Fixed income has been slower, perhaps because the world is not short of fixed income hubs and most of it goes over the counter anyway.

“We will still get our fair share of IPOs here,” he says, “but broadly, companies will want to stay private longer. We have had more than 10 years of very low interest rates, which has meant an abundance of liquidity.”

Surge

The surge in private equity has also tended to keep companies away from markets for longer.

There is a sense that sooner or later, most exchanges are going to look like this.

“You’ve got to be more than just a specialist in a particular form, whether it’s a cash market or derivatives or some other asset class,” he says. “That’s the way we see the world evolving around the exchange space.”

To increase reach, SGX has also set about building alliances, including ones with Nasdaq and the Tel Aviv Stock Exchange.

Looking back at his earlier world, there is a sense that the glory days have gone. If he was still running a global markets business at a bank, would he expect to be able to build a sustainable business?

“Yes I would, but the model would have to be slightly different,” he says. “In the trading markets before, exchange-traded risk management products were distinct from OTC, but it has to be more integrated today.”