Key Takeaways
- • Hong Kong Exchanges and Clearing (HKEX) and Bursa Malaysia Berhad signed a Memorandum of Understanding establishing a strategic collaboration to enhance capital market connectivity between the two exchanges.
- • The partnership launches the HKEX Bursa Malaysia Large Cap Index, a co-branded benchmark comprising 60 of the largest companies listed in Hong Kong and Malaysia by market capitalization (30 constituents from each market), weighted approximately 60% Hong Kong and 40% Malaysia.
- • HKEX has entered into licensing agreements with five issuers to develop exchange-traded funds (ETFs) in Hong Kong tracking the new co-branded benchmarks, expanding the product ecosystem.
- • Collaboration scope extends beyond indices to include dual listings, joint development of investment products, Shariah-compliant securities, and carbon market initiatives.
- • The partnership aligns with HKEX's strategic priority to expand regional engagement in Southeast Asia and build multi-asset product offerings that draw global liquidity to Asian markets amid macroeconomic uncertainty.
Summary
Hong Kong Exchanges and Clearing (HKEX) and Bursa Malaysia Berhad formalized a strategic partnership through a Memorandum of Understanding, marking a significant step in regional market connectivity and product development. The collaboration represents HKEX's deliberate effort to strengthen ties with Southeast Asian capital markets and enhance its competitive positioning in a region identified as one of the world's fastest-growing investment destinations.
The centerpiece of this collaboration is the launch of the HKEX Bursa Malaysia Large Cap Index, a jointly branded benchmark designed to measure the performance of the 60 largest companies listed on both exchanges by market capitalization. The index composition reflects a balanced regional approach: 30 constituents are drawn from the Hong Kong market and 30 from Malaysia, with index weightings of approximately 60% for Hong Kong-listed companies and 40% for Malaysian-listed companies. This weighting structure provides exposure to both mature Hong Kong equities and growth-oriented Malaysian securities.
To translate this benchmark into tradable products, HKEX has established licensing agreements with five issuers to develop exchange-traded funds in Hong Kong that will track the co-branded indices. This product launch strategy removes direct distribution barriers and accelerates access for institutional and retail investors seeking dual-market exposure. Bonnie Chan Yi-ting, Chief Executive of HKEX, emphasized that the initiative reflects the exchange's commitment to advancing regional connectivity through tangible, market-ready outcomes.
Beyond index and ETF development, the MOU encompasses a broader collaborative framework spanning multiple asset classes and market segments. The exchanges have committed to cooperating on dual listings—a critical mechanism for cross-border capital flows—as well as joint development of additional indices and investment products. The partnership also extends to Shariah-compliant securities and carbon market initiatives, positioning both exchanges to capture flows from Islamic asset managers and ESG-focused investors.
Dato' Fad'l Mohamed, Chief Executive of Bursa Malaysia, characterized the partnership as instrumental to boosting market vibrancy, expanding opportunities for Malaysian public listed companies (PLCs) and investors, and enhancing Malaysia's visibility within the global investment landscape. For HKEX, the partnership supports its stated strategic priority to build a comprehensive multi-asset product ecosystem and draw global liquidity to Asia during a period of heightened macroeconomic uncertainty, particularly as regional capital markets compete for international allocation.
The centerpiece of this collaboration is the launch of the HKEX Bursa Malaysia Large Cap Index, a jointly branded benchmark designed to measure the performance of the 60 largest companies listed on both exchanges by market capitalization. The index composition reflects a balanced regional approach: 30 constituents are drawn from the Hong Kong market and 30 from Malaysia, with index weightings of approximately 60% for Hong Kong-listed companies and 40% for Malaysian-listed companies. This weighting structure provides exposure to both mature Hong Kong equities and growth-oriented Malaysian securities.
To translate this benchmark into tradable products, HKEX has established licensing agreements with five issuers to develop exchange-traded funds in Hong Kong that will track the co-branded indices. This product launch strategy removes direct distribution barriers and accelerates access for institutional and retail investors seeking dual-market exposure. Bonnie Chan Yi-ting, Chief Executive of HKEX, emphasized that the initiative reflects the exchange's commitment to advancing regional connectivity through tangible, market-ready outcomes.
Beyond index and ETF development, the MOU encompasses a broader collaborative framework spanning multiple asset classes and market segments. The exchanges have committed to cooperating on dual listings—a critical mechanism for cross-border capital flows—as well as joint development of additional indices and investment products. The partnership also extends to Shariah-compliant securities and carbon market initiatives, positioning both exchanges to capture flows from Islamic asset managers and ESG-focused investors.
Dato' Fad'l Mohamed, Chief Executive of Bursa Malaysia, characterized the partnership as instrumental to boosting market vibrancy, expanding opportunities for Malaysian public listed companies (PLCs) and investors, and enhancing Malaysia's visibility within the global investment landscape. For HKEX, the partnership supports its stated strategic priority to build a comprehensive multi-asset product ecosystem and draw global liquidity to Asia during a period of heightened macroeconomic uncertainty, particularly as regional capital markets compete for international allocation.
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