A comparison of local and foreign tranche stocks listed on the SES and the KLSE

Abstract

Since dual listing began in 1988 for SIA and SPH, there are now 17 companies listed on the SES and 8 companies on the KLSE which have foreign and local tranches. Due to the restriction on foreign ownership, foreign investors (usually institutions) with deep pockets compete for a limited number of foreign tranche shares. This results in the phenomenon of the foreign tranche trading consistently at a premium to the local tranche being noticed. This paper will seek to investigate and explain the observed price differential of the 17 companies listed on the SES and the 8 companies listed on the KLSE.