SINGAPORE Exchange Regulation (SGX RegCo) will look into how and when it queries listed companies, said chairman Tan Cheng Han and chief executive officer Tan Boon Gin, as part of efforts to “remove frictions” for such businesses.
“We need to balance our role in ensuring that material information is disclosed, while enabling companies to take value-focused actions that are then correctly valued through uninterrupted trading,” they said in a letter on Monday (Sep 16) evening.
This adds on to the steps the regulator has already taken to make queries regarding companies’ unusual trading activity more targeted, they added.
Reducing frictions for companies is one priority for SGX RegCo in the new financial year, along with enhancing the effectiveness of boards of directors and encouraging market discipline from shareholders.
“Effectively, companies need to hear what the market is asking for, and the market needs to reward the companies that listen and act,” both said, adding that SGX RegCo will continue to play its role in creating a trusted market where “the forces of supply and demand can interact in a fair and orderly manner”.
Echoing them, SGX chief executive Loh Boon Chye said in a letter to shareholders that reducing market friction is one way in which the regulator can support efforts to transform Singapore’s equities market.
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“It is evident that our cash equities business needs more work,” said SGX chairman Koh Boon Hwee in a separate letter to shareholders.
“As an exchange, we operate multiple marketplaces, but we do recognise that the role of our stock market goes beyond its financial relevance as a business line,” said Koh. “For many growing enterprises, it is fundamental that the private-to-public cycle through the stock market is available for them to readily raise capital and advance further.”
While the exchange should not expect nor require Singapore-domiciled companies to be listed locally, there is a “sizeable pool of companies” here and in the region that will be better off seeking liquidity in a place where their products and services are known to the population at large, he added.
“Except for some of the largest companies in the world, a company listing on a far-flung exchange runs the risk of becoming irrelevant over time.”
Meanwhile, Loh noted that in FY2024, the overall volumes in Singapore’s equities market were subdued. “While we saw signs of volumes improving in the second half of the financial year, more needs to be done to structurally enhance liquidity and listings.”
“A more holistic approach with efforts from all stakeholders is required for real change to take place,” he said.
SGX will work closely with the review group set up by the Monetary Authority of Singapore on such efforts, alongside its own work in product development, research and education, issuer and investor outreach, and regional partnerships.
On sustainability, SGX remains the number one listing venue for international G3 currency green, social, sustainability and sustainability-linked (GSSS) bonds by Asia-Pacific issuers. About 15 per cent of its total new listings in FY2024 were GSSS bonds.
The exchange’s focus remains in supporting and collaborating with the ecosystem to “scale transition finance through sustainable fixed-income initiatives”.
Separately, in the annual report issued on Monday, SGX also disclosed that Loh’s salary increased 2.7 per cent to S$7.8 million for the financial year ended Jun 30, 2024, from S$7.6 million a year ago.
Shares of SGX closed S$0.12 or 1.1 per cent lower at S$11.11 on Monday, before the announcement.
