The Singapore Exchange (SGX) will enhance its bond offerings via Trumid XT, an electronic bond trading platform.

This comes after Asian Gateway Investments (AGI) – a subsidiary of SGX – signed an agreement with Trumid Holdings, HH THL Holdings (Hillhouse) and other undisclosed parties on Feb 8.

Under the agreement, a joint venture (JV) company called XinTru will be incorporated in Singapore.

XinTru will launch and operate Trumid XT, which aims at enhancing liquidity and execution in the Asian bond market for global clients.

Loh Boon Chye, CEO of SGX, says the JV will combine each member’s respective strengths to the benefit of fixed income investors.

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Trumid is a US-based fintech company and electronic trading platform for corporate bonds, while Hillhouse is an affiliate of private equity firm Hillhouse Capital Group.

Loh notes that Trumid’s strength resides in its technology and fixed income expertise, while Hillhouse’s edge lies in its expertise and network in Asia and the financial services sector.

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And of course, SGX’s strength dwells in its experience in Asian financial market infrastructure and electronic trading, he adds.

“XinTru will bring a new level of market infrastructure for the electronification of bond trading in Asia,” Loh tells reporters on Feb 8.

As part of the consideration to own a one-third interest in XinTru, AGI will pay 100% of the shares of SGX Bond Trading, a wholly owned subsidiary of SGX.

SGX Bond Trading has a book value of $31.4 million as at June 30, 2020.

The consideration will also include cash, the provision of certain support services such as general counterparty service, and other intangibles.

Loh declines to disclose the amount of cash consideration.

SGX Bond Trading will cease to be a subsidiary of SGX following the transaction.

On Feb 8, SGX closed up 2 cents or 0.2% at $9.84 with 3.3 million shares changed hands.