MORE CAN BE DONE
In brief, the true problem is to carry general secondary buying and selling liquidity in SMEs on the SGX, and extra may be achieved.
One risk is to take away SGX clearing and buying and selling charges to scale back friction prices for proprietary merchants and market makers. Encouraging and attracting proprietary buying and selling and market making to the SMEs can assist enhance the bid–ask spreads – the distinction between the best worth a purchaser is able to pay and the bottom worth a vendor is keen to simply accept – and enhance liquidity and buying and selling exercise.
One other may very well be to encourage SGX member brokerage corporations to rent in-house proprietary merchants who commerce utilizing a agency’s personal capital, quite than consumer funds, and might present buying and selling liquidity to the market, as was the case in the course of the heydays of the market previous to the 2013 penny inventory crash. To make sure, some stage of regulatory policing is perhaps wanted to stop the creation of a false market.
Lastly, reporting templates in SGX bulletins may very well be created for half and full-year outcomes the place corporations can present extra specific and detailed ahead earnings steering and outlook. These fields within the template may be made obligatory.
Delisting might make sense. However earlier than making this the default means out, different choices ought to be checked out. Buyers deserve that a lot, on the very least.
Ven Sreenivasan is a former editor and journalist who has lined monetary markets, financial and company information and aviation for greater than 30 years.