Twenty-seven companies were added to the Singapore Exchange's (SGX) watch list yesterday for failing to meet the revised minimum trading price (MTP) rule.

That makes 78 mainboard-listed firms in all on the list - representing about 10 per cent of the total number of companies listed on the SGX.

All up, 29 firms entered the watch list yesterday under the regulator's first review since the MTP rule was tweaked last December.

This included two firms that failed to meet separate financial entry criteria based on profitability.

The MTP framework, which took effect last March with a 20-cent MTP for mainboard-listed companies, was meant to flag those stocks most prone to excessive speculation and potential manipulation.

But the 20-cent MTP rule drew fierce criticism from many who saw companies lose millions in market value after being forced to undertake share consolidations.

Some of these firms did so without fixing their underlying problems, which only resulted in prices plunging again.

In response to feedback, the SGX relaxed the MTP rule in December so that a mainboard-listed firm that maintains a six-month average daily market capitalisation of over $40 million will not be put on the watch list even if it misses the 20-cent MTP requirement.

The revised criteria proved a boon for two companies, which exited the watch list yesterday under the latest assessment.

Drilling rig owner Jasper Investments and petroleum exploration and production firm Interra Resources were removed from the list, thanks to the new market cap criteria. The SGX also said that if the MTP rule had not been refined, a "significantly higher" number of firms would have been put on the list.

But the number of firms on the watch list has not fallen.

When the MTP was introduced last March, 57 companies failed to meet the rule. Now, it is 66. (The other 12 making up the total 78 on the watch list are there for failing to meet the financial criteria.)

Mr Leon Yee, a lawyer and independent director of Federal International, which was one of over 100 issuers that previously resorted to share consolidations to meet the MTP, said: "There is a mismatch between financial performance and share price performance in Singapore, because of the low liquidity of our markets.

"As the years go by, more companies will go on the watch list, because there is only so much liquidity to go around. Until now, the regulator is still stuck on this. The fact of the matter is, it is not working out for issuers."

Firms on the watch list have three years to meet the MTP or financial criteria. Otherwise, they face a delisting.

Perhaps, more tweaks to the MTP rule are not out of the question. In April, Professor Tan Cheng Han, the new chairman of RegCo, which is taking over all of SGX's regulatory functions, declared that he would not be afraid to reassess sacred cows in the rules framework.