But that might be changing, as companies explore the possibility of listing in non-U.S. markets. “I think we’re coming into an era of what we would like to call the re-globalization of regional hubs,” Lokur said.
Some exchanges have initiated programs to encourage people to invest locally rather than overseas, potentially spurring an era of financial nationalism.
“In the past, we were much more reliant on foreign capital, but today not so much,” Jason Saw, group head of investment banking at CGS International Securities, said. “Malaysia is home to one of the largest pension funds in the region…The Monetary Authority of Singapore has initiated a program to invest 5 billion Singapore dollars ($3.8 billion) into the local market. So we’re seeing a trend of governments asking for funds to invest in local markets.”
There’s “cautious optimism,” Yuelin Yang, who sits on the board of the Asian Corporate Governance Association, said. But issues like cross-shareholdings—where companies hold shares in each other—and tunnelling—where a majority shareholder secretly funnels business to themselves for personal gain—are still creating “a lot of nitty-gritty differences in each market,” he warned.
Southeast Asia’s markets alone may not be as large as their regional peers. Both the U.S. and China offer deep pools of institutional and retail capital. But Saw, of CGS, suggested that ASEAN as a whole might be large enough to compete.
“I am very optimistic about the capital in ASEAN and the connectivity that we can do. If we’re able to narrow that pool of capital together to say that we’re one bloc, that’s going to be something really powerful” he said.
But the question of where to list may soon become less relevant in the future, particularly as new tools and services allow investors to more easily access global markets.
“The key question for many companies in the last century was where to list. But for the next century it would be about how to connect,” Lokur, of Morgan Stanley, said. “This is a reimagining of finance itself.”
