The Singapore Exchange’s proposed reduction of the board lot size for stocks trading at S$10 and above is a positive development.
I recently shared my views on this initiative with Koh Kim Xuan of The Business Times. In the article, “Reduced SGX board lot sizes a win for investors, but issues remain,” published today, I discussed how this move could catalyse investor interest and improve market dynamics.
Key Highlights: As I noted in the report, enhanced liquidity is crucial for the Singapore bourse:
“With more liquidity, this will motivate issuers to raise new funds by further tapping the Singapore equity market post-IPO.”
I believe this will create a “ripple effect” that precipitates a much-needed “light-house impact,” attracting more foreign issuers and local companies to list on the Singapore stock market.
Aligning with Global Standards: In the United States, the standard board lot size is 100 shares. To maintain a large board lot size in Singapore is untenable, especially considering the proposed new Global Listing Board designed to facilitate dual listings on SGX and Nasdaq.
Making shares in larger listed corporations more affordable will promote active trading. This improved liquidity will engender a more dynamic Singapore market—addressing a factor that has long been identified as a reason for the lacklustre bourse prior to the recent Equity Market Development Programme announcements.
You can read the full article on The Business Times website here.
My original post on LinkedIn can be seen here.