Urgent action needed to restore confidence to Singapore market
I read with interest your BT article “Singapore market value
down five months in a row” on Oct 1, 2015. It is worrying that despite all the
IPO capital raising from 2012 to 2015, the Sept 30, 2015 closing market cap
“was the lowest month-end reading since August 2012, when the total market was
worth S$829.3 billion”.
Comments
NS Nallakaruppan
03 October 2015
I read with interest your BT article “Singapore market value down five months in a row” on Oct 1, 2015. It is worrying that despite all the IPO capital raising from 2012 to 2015, the Sept 30, 2015 closing market cap “was the lowest month-end reading since August 2012, when the total market was worth S$829.3 billion”.
There was also an earlier article headlined “Singapore firms’ IPO proceeds fall to lowest since 2009” (BT, Sept 22) which stated that capital raising for the first nine months of 2015 stood at US$91.7 million, which is also a 95.6 per cent slump compared to the first nine months of last year.
All this worrying news clearly shows that our Singapore market is in a dire state. It is not only a cyclical issue but a real structural problem.
We, from the broking community, had written a letter with 1,225 signatories, dated Jan 15, 2015, to our Deputy Prime Minister & then-Finance Minister Tharman Shanmugaratnam about the state of our moribund market and made an earnest plea to rebuild much-needed confidence. We had made several recommendations which we truly believed would have brought back vibrancy to our markets. Sadly, most of our recommendations have not been implemented and our markets have gone from bad to worse since then.
Subsequent to our letter, we have had a couple of meetings with MAS but sadly, nothing much concrete has come out so far. One of the issues we highlighted several times was the Minimum Trading Price policy, which has destroyed a lot of investors’ wealth and undermined gravely the markets’ confidence.
If a policy has failed, we must have the courage to admit it and take corrective action. If we continue with these types of flawed policies, we will end up in a situation like the one we are in now. Also, more importantly, we need policy makers who must have at least some years of market experience who can then really understand what the market really needs. Theoretical knowledge is not sufficient.
Our market is now akin to being in an intensive care unit. We need urgent attention and care, otherwise we will be history.
The investors and broking community were looking forward to the new SGX CEO and hoping that it would be the dawn of a new and promising era for our markets. Three months have come and gone and the hope is fading rapidly and reinforcing the notion that nothing much of significance will be undertaken.
Granted, it is only three months but looking at the state of our markets, we should be cognisant that we do not have the luxury of time. Many investors have given up hope. Now, even the broking community is fast losing confidence.
I have been in the industry for 21 years and haven’t seen our markets in such a pathetic state for such a prolonged period. As a Singaporean, I feel really sad that we have left our markets in such a sorry state and that nothing much has been done for such a long time. Our SMEs are having a tough time raising capital through our markets. Our investment banking community is also suffering and our economy is drastically affected.
We, the investors and the broking community, need to have a serious pow-wow session with our new Finance Minister, Heng Swee Keat, and come up with real practical solutions to rebuild the much-needed confidence of our markets.
I sincerely hope Mr Heng, together with the investors and the broking community, will re-establish the Singapore market as a top Asian gateway which Singaporeans will be proud of.