Recently, I read an article on The Straits Times which talked about the lacklustre stocks markets here in Singapore. Lacklustre from the angle of shrinking total capitalisation of the Singapore stocks markets as well as a trend of more delisting versus IPOs.
am not surprised at all at the article since being an avid investor of Singapore stocks, I have been noticing that indeed the local stocks markets have not been that vibrant for a number of years already. And not only that, the local stocks markets have been experiencing many phenomena which has not boded well. Examples include seemingly good stocks including Straits Times Index stocks heading south be it suddenly or gradually. And small to middle-cap stocks were not spared either as they were hit with corporate sagas and either forced or went for delisting.
Over the past few years, we have seen how SGX has introduced measures to improve trading liquidity like (a) defining lot size to be 100 shares rather than 1000 shares; (b) removal of lunch hour (but I think this is now reinstated) and (c)requiring the stock price on mainboard to be maintained at minimum $1 per share. But all these measures seem not enough to boost the vibrancy of the local stocks markets.
I have shared many times here that the challenge for Singapore listed companies is simply that the market in Singapore is small and hence this caps the growth of Singapore companies if they were to base their markets solely on Singapore. And if Singapore companies were to venture overseas, they would meet with risks. I have seen how a number of listed companies head overseas only to find it hard to navigate the landscape outside of Singapore. And the other important point that is not to be ruled out is the increasing competition in this current markets which are also disruptive.
The very question in relation to making Singapore stocks markets is this: in the times of the internet where an investor in Singapore can trade stocks from all over the world, what is the compelling distinctive factor of Singapore stocks compared with its regional and international peers? That is simply why should investors here in Singapore invest in Singapore stocks when there are so many other international stocks to invest in at the click of the mouse on the online trading platform? Indeed, this is a question that the authorities should focus on.
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