Visiting U.S. Defense Secretary Leon Panetta on Monday urged Japan and China to peacefully resolve the intensifying territorial dispute over the Senkaku Islands, expressing concern the diplomatic row could result in a military clash over uninhabited islets in the East China Sea. ”It is extremely important that diplomatic means on both sides be used” to avoid further escalation, Panetta said… [H]e also repeated that the United States will “stand by treaty obligation” with Tokyo, which includes defending Japanese soil, based on the Japan-U.S. security treaty…The Japan-U.S. security treaty obliges the U.S. to defend Japan if an area under Japanese administration is attacked by another country. But observers say if a remote island is attacked, it would likely be up to Japan to respond first, not the U.S. military…

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It might seem unlikely that this situation could evolve into major confrontation, there are signs that tensions between Japan and China could get worse if some sort of solution is not found. This information comes as anti-Japanese protests in China spread and claims to certain Southeast Asian islands by members of the Association of Southeast Asian Nations (ASEAN) are voiced. Hopefully, this situation will be resolved peacefully and to the benefit of all concerned.

Meanwhile, it would appear that the Malaysian and Singaporean stock exchanges are set to link up in an effort to provide more trading opportunities and capabilities on each of those respective platforms. To shed further light upon these developments it is necessary to quote from the official website of Live Trading News, LiveTradingNews.com:

The Malaysian and Singaporean stock exchanges are seeking to attract individual investors and boost volumes by offering cross-border trading, the 1st step in creating a Southeast Asian platform. Singapore Exchange Ltd. (SGX) and Bursa Malaysia Bhd. (BURSA) start offering the services Tuesday…

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These developments could result in future interest in Southeast Asian Securities from investors abroad. Concurrently, it would appear that Thailand’s stock exchange is prepared to provide more integrated services for ASEAN investors, to quote further from the aforementioned article:

[T]he Stock Exchange of Thailand is set to join the link-up between the Association of Southeast Asian Nations members next month…The trading platform is part of a push by Asean Exchanges to boost regional capital markets and lure more investors to exchanges whose companies had a combined market value of $1.98-T at the end of March, according to the group’s website…

Although the results of these efforts remain to be seen, there is good reason to speculate that these developments could lead to further investment in Southeast Asia both by domestic investors as well as investors from outside the region.