Liquidity fix for small and mid-caps on SGX requires more to be done
SGX chairman Koh Boon Hwee comments on liquidity issues for small and mid-cap stocks, suggesting companies should take responsibility for raising market awareness. Many small and mid-cap stocks remain rangebound and thinly traded despite broader market gains.
Intelligence analysis by Qwen 2.5 (3B)
SGX chairman Koh Boon Hwee discusses liquidity issues for small and mid-cap stocks, suggesting companies should take responsibility for raising market awareness. Many stocks remain rangebound and thinly traded despite broader market gains.
The big companies on the stock market are doing well, but small and medium-sized companies are still having trouble selling their stocks. The stock market needs to do more to help these smaller companies.
Analysis
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Small and Mid-Cap Stocks in the Singapore Market":"Small and mid-cap stocks on the SGX continue to face liquidity issues despite broader market gains. The benchmark Straits Times Index (STI) has risen from around 3,800 at the start of 2025 to over 5,000 points today, driven largely by the three local banks, which account for more than half of the index's weightage. However, this masks the issue that many small and mid-cap stocks, especially those with market capitalisation below S$200 million, remain rangebound and thinly traded.","
The Role of the SGX":"The SGX has taken steps to improve liquidity, including the Equity Market Development Programme (EQDP), which has brought in a burst of liquidity in the local market. However, the EQDP has not yet had a significant impact on secondary trading and liquidity on SGX. Maybank notes that while S$5.4 billion of the EQDP funds have been allocated, it has yet to meaningfully appear as institutional buying in the market.","
The Responsibility of Companies":"SGX chairman Koh Boon Hwee suggests that companies should take responsibility for raising market awareness of their worth. While companies have put in significant effort, such as through detailed investor engagement exercises, their shares can still be thinly traded. Companies like ISOTeam, Nordic Group, and Sasseur REIT are examples of those facing liquidity issues."}
Key points
- SGX chairman Koh Boon Hwee suggests companies should take responsibility for raising market awareness of their worth.
- The SGX has taken steps to improve liquidity, including the Equity Market Development Programme (EQDP), but it has not yet had a significant impact on secondary trading and liquidity on SGX.
- Many small and medium-sized companies are still having trouble selling their stocks, which can make it hard for them to raise money or do big business deals.
The Equity Market Development Programme (EQDP) is bringing in more money to help companies, but it's not yet having a big effect on the smaller companies' ability to sell their stocks.
Even with the EQDP, many small and medium-sized companies are still having trouble selling their stocks, which can make it hard for them to raise money or do big business deals.
