Kelly Trinh

Backoffice technical at financial services firm

21 Nov 2019

∙

Why is there low liquidity on the SGX?

I understand there is a lack of liquidity on the SGX and that is leading companies to consider to list on HKEX or ASX instead. Does anyone know why there isn't more trading action locally?

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Elijah Lee

21 Nov 2019

Senior Financial Services Manager at Phillip Securities (Jurong East)

Hi Kelly,

A number of reason combine to form a lethal cocktail, namely

Listing fees - Very high compared to other exchanges, in the region of $100K minimum from what I heard
Brokerage fee - SGX has clearing and trading fees, other exchanges seem to be lower
Penny stock crash - This sullied the reputation of the exchange
Focus - Singaporeans tend to back stable dividend stocks, not fanciful high-tech ones. If Tencent listed here, it probably would not have had explosive growth

I'm sure there are other factors too. SGX has known this for a while now and their focus has shifted to the derivatives market, which is their fastest growing segment.

Well, at least shares are in lots of 100 now, if not it would be worse. Can you imagine trying to buy 1 lot (1000) of DBS or Jardine? That'll set a number of people back quite a fair bit.

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