Singapore Exchange (SGX) is set to launch a new chapter next month, with homegrown veteran banker Mr Loh Boon Chye taking the helm.
Industry players said they are optimistic that the new CEO will be able to take the bourse forward, with necessary reform. However they also said he has his work cut out for him, as there are challenges ahead.
Keppel DC REIT’s IPO on the mainboard last year was Singapore’s second largest in 2014, raising more than S$500 million. As a whole, the IPO market in Singapore has been languishing, and this year, there have been only three listings so far, raising about S$55 million.
Meanwhile, trading volumes have remained sluggish, with about one billion shares traded daily. Latest numbers from the SGX showed that securities turnover in May on the SGX was S$23 billion, a decline of 2 per cent from a year ago, and a bigger drop of 13 per cent when compared to April.
Market participants said problems confronting the bourse is structural in nature and Mr Loh will have to engage with more stakeholders to adopt a new approach.
“He has to probably assemble a good team, with that team he has to then reach out to the different stakeholders that have been actually involved in the past but have been to a large degree marginalised because of what’s happening all around us in Asia,” said Mr Nicholas Teo, market analyst and client education at CMC Markets Singapore.
“Those are probably the first steps that he has to take and with that with his team with the stakeholders involved, perhaps a new sort of approach can be made in terms of trading, on the secondary market, IPOs for example, trying to invite, engage and try to attract the relevant sort of companies, not just by themselves but also as an industry to be able to bring in an ecosystem.”
The Society of Remisiers added that the right amount of regulation coupled with a consultative management style could see the bourse charting in the right direction.
“In terms of the regulation, how you regulate, how you market the products, which direction you promote, even to the tiniest element like the lunch break, all these matter,” said Mr Jimmy Ho, President of The Society of Remisiers.
“It’s important that SGX or the authorities take a consultative approach to the Singapore stock market. The top-down approach has proven that it doesn’t work. Each time when something is decided and the people on the ground, the front-line soldiers are notified only when all the implementation processes are in place and later you find that there will be a lot of feedback that this cannot work out and in the end you’ve got to go and salvage the situation.”
Market analysts added that in order to attract more quality IPO listings, the key thrust lies in having a complete set of plans targeted at the entire industry, so as to ensure continuity in the secondary markets.
They said public education on the specific sector and engagement with the Monetary Authority of Singapore to explore possible tax incentives would also help revive the lacklustre IPO scene.
Shares of SGX have lost about 10 per cent in value over the past two weeks. On Tuesday, the counter bounced in early trade on news that a new CEO had been named, but it gave up those gains and more, finally closing the day 0.4 per cent in the red, at S$7.90 each.
Source: www.channelnewsasia.com
