To balance the view, here are the SGX and SIAS responses to the letter.
Singapore market starting to find its feet: SGX
SINGAPORE: Singapore Exchange’s (SGX) Executive Vice President Chew Sutat on Thursday (Feb 6) debunked claims of issues plaguing the industry.
In an interview with Channel NewsAsia, Mr Chew said SGX has performed better than its counterparts in Hong Kong and Japan in the last 10 years.
More than a thousand remisiers and investors had written a letter to Finance Minister Tharman Shanmugaratnam in January, asking for help in resolving the alleged issues. They pointed out that annual trading volume on SGX had fallen 26 per cent over the past five years, saying that it was due to a loss of investor confidence in the bourse.
In response, Mr Chew said: “On the performance of the market, the STI index delivered a 9.5 per cent return last year, which is fantastic. Over the last 10 years, it is an average of 8.7 per cent – better than Hang Seng at 6.6 per cent, the US markets at 5 per cent and Tokyo at 2.5 per cent.
"If we look at market volumes, the last three months we have seen 20 per cent year-on-year growth. So I think the market is starting to find its feet, it is doing well in terms of investor returns and in terms of participation for all segments of the market."
One way to boost trading volume in SGX is perhaps to attract the billion-dollar IPO listings, and Mr Chew said the exchange would love to see more of such listings - but this has to be seen in the right perspective.
"The market capitalisation in Singapore has grown six per cent year-on-year to almost S$1 trillion. I think that is a pretty good measure on the performance of the capital market here. Over and above that, we had 42 listings last year, not just local SMEs... We have had some very strong international listings that have come to Singapore as well," he said.
Mr Chew added that SGX "would love to have" some of Singapore's large GLCs (Government-linked companies), who are private right now, come in to the market.
Another concern for investors was the two major outages that affected the bourse last year. Mr Chew said that while it did not affect investor confidence in the bourse, the outages "should not have happened".
"We have taken steps to address the matter and of course, we hope that it does not repeat itself again," he added.
http://www.channelnewsasia.com/news/busi...41052.html
Remisiers Face Changing Retail Investor Profile: SIAS
We refer to the article published in Business Times 5 February “Remisiers write to Tharman to resolve issues plaguing market” by R Sivanithy.
SIAS is aware of the plight of remisiers in the current low trading volume market environment. While there is room for improvement in our market, such as overcoming the issues surrounding several S-Chips sagas e.g. China Sky, that have caused many retails investors to suffer, retail investors also are looking for advice, investment ideas and opportunities from remisiers to help them grow their monies. These tend to be the older investors who depend on their remisier to execute their trades.
Whist it is important to continue to build confidence in our market, it should done prudently and not encourage excessive risk and speculation. For example, the suggestion to transfer long-suspended stocks with governance issues to a third high-risk board and allow trading with cash up-front would only drive speculation as there is insufficient transparency and information for a fair and orderly market to operate.
SIAS is also not in favour of increasing the limit of 35 to 80 percent of CPF Ordinary Account for investment in equities because retirement funds should not be exposed to excessive risk. Nevertheless, SIAS does agree that there is a need to raise the quality bar for CPF Trustee stocks to ensure that only stocks of quality investible standards are included as the CPF investment scheme is designed to help fund Singaporeans’ retirement savings. A more active review of the list of stocks and timely alerts to retail investors using their CPF funds to invest in these equities should be implemented.
SIAS also agrees on the proposals for better rules for short selling disclosures, calling for a review on regulations for sophisticated instruments, the need to providing the market with regular updates on on-going investigations and the call to separate SGX’s commercial and regulatory roles, of which, some are already under review. Currently, it is common practice for SGX and MAS to seek public consultation and obtain feedback from all stakeholders on any policy and rule changes rather than have an independent committee to review policy changes. This provides the opportunity for all stakeholders to have their say and, therefore, it should continue.
One possible reason for the unhappiness faced by remisiers is heightened today by the shift in the investor profile. The fact that almost one third of new CDP accounts holders are under 25, who tend to favour online trading versus dealing with remisiers, could also explain the plight of the remisiers today.
SIAS hopes that with initiatives like the reduction of the board lot size to 100 from 1000, the initiatives by SGX like the introduction of StockFacts, SGX Mobile App and retail education efforts, conducted in collaboration with SIAS, would continue to improve participation in our market.
David Gerald
President & CEO
Securities Investors Association (Singapore)
http://sias.org.sg/index.php?option=com_...43&lang=en