Investing in SGX shares
Ex-CEO of SGX, Magnus Bocker passed away last week due to cancer. Bocker came to Singapore with a big reputation of being a dealmaker. Prior to heading SGX, he made his name for selling OMX to Nasdaq for USD4.9 billion. Bocker took over from outgoing CEO Hsieh Fu Hua in 2009 but left in 2015 when he decided not to renew his contract. In this article, l am sharing my views on whether it is worthwhile to invest in SGX shares.
Under Bocker’s tenure, SGX implemented various initiatives aimed at expanding SGX’s market share beyond the stock market. Notably, revenue from derivatives now formed 40% of the annual revenue. As a dealmaker, he also tried to transfer his merger and acquisition experience to SGX and made a bid to merge with Australia’s ASX. That bid ended up in failure when the Australian government rejected the proposal.
Bocker’s reign also saw SGX introducing a slew of policies targeted at boosting market liquidity and protecting investor’s interest. In 2014, dynamic circuit breaker was introduced to guard against disorderly situations in the face of rapid and unchecked market movements. In light of the penny stock crash in 2013, Minimum Trading Price (MTP) was introduced by SGX to prevent speculation and market manipulation. The initial rule required companies to maintain trading price of $0.20.
Bocker was widely credited with reducing the standard board lot size of securities listed on SGX from 1,000 to 100 units from 19 January 2015. It was envisioned that smaller board lot size will make it more affordable for retail investors to invest in a wider range of equities, including blue chips, and enable them to build more balanced and diversified portfolios.
It was the Bocker’s idea of removing the trading lunch break on 1 March 2011 that led to his ultimate downfall. In a press release, Bocker claimed that “Singapore’s leading position as an international financial centre depends on its ability to stay nimble and meet customers’ needs. Investors are constantly seeking trading opportunities and continuous all-day securities trading will provide more avenues for participants to invest, hedge and arbitrage their investments.”
Nonetheless, many remisiers did not agree with Bocker and there was [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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