Business · Singapore Bureau
SGX can do more to boost liquidity in small-cap stocks: analysts
While the Singapore Exchange argues it should not bear sole responsibility for poor liquidity in smaller-listed companies, observers say the bourse has room to improve its offerings and support mechanisms for this segment.
LSN Singapore ·
The Singapore Exchange has defended its position on liquidity challenges faced by small and mid-cap stocks, contending that poor trading volumes are not solely the bourse's responsibility. However, financial analysts and market observers argue that SGX could implement additional measures to address the problem.
Liquidity constraints remain a significant concern for smaller-listed companies on the Singapore market, affecting their ability to raise capital and trade efficiently. While companies themselves bear responsibility for investor relations and maintaining market interest, the exchange operator can play a more active role in creating conditions that encourage trading and participation in this segment.
Potential improvements could include enhanced market-making programs, refined listing requirements that better suit smaller enterprises, or targeted marketing initiatives to attract retail and institutional investors to the small and mid-cap space. Such measures would complement existing frameworks while acknowledging the shared responsibility between the exchange, listed companies, and market participants.
Industry participants suggest that addressing liquidity in this segment is crucial for Singapore's competitiveness as a regional financial hub and for supporting the growth prospects of emerging local enterprises. The exchange continues to evaluate ways to strengthen its offerings while balancing the needs of various market participants and maintaining regulatory standards.