SGX may reinstate midday intermission

The Singapore Exchange is considering reinstating the midday intermission, which lasted from 12.30pm to 2pm every day, after cutting it in 2011 in an effort to boost trading, Bloomberg reported.
The Singapore Exchange is considering reinstating the midday intermission, which lasted from 12.30pm to 2pm every day, after cutting it in 2011 in an effort to boost trading, Bloomberg reported.PHOTO: BLOOMBERG

Public consultation will be held on the break that was cut in 2011

Singapore stock traders may finally get their lunch break back. The Singapore Exchange is considering reinstating the midday intermission, and will hold a public consultation on the issue in coming weeks, Bloomberg reported.

SGX will also propose a test that would widen the price increment at which shares are quoted to bring day traders back, Bloomberg said, quoting sources.

SGX cut the midday break, which lasted from 12.30pm to 2pm every day, in 2011 in an effort to boost trading. Then chief executive officer Magnus Bocker said in January 2011 that having continuous trading from 9am to 5pm could boost volume by 10 per cent, and make Singapore "one of the most accessible markets in Asia and in the world".

Replying to a query from The Straits Times yesterday, Mr Chew Sutat, head of equities and fixed income at SGX, said: "As part of the ordinary course of business, SGX routinely reviews our market structure, rules and policies, taking into account market conditions, industry feedback and supported by data analysis.

"We will, as and when appropriate, seek public consultation on any proposed changes," he added.

The daily average value of shares traded on SGX this year has risen 6.4 per cent, to US$809 million (S$1.1 billion), compared with the average last year, according to data compiled by Bloomberg.

While up from last year, it is down from the US$1.12 billion a day the market saw in 2013, the data shows.

SGX's price movement proposal would reward brokers by widening the spread they earn when buying and selling shares, sources told Bloomberg. That could encourage trading in small-cap companies.

If the plan goes ahead, it would be at least the third time in a decade that SGX has tweaked stock spreads. In 2011, it cut tick sizes to offer what it called "one of Asia's most cost-competitive trading environments". It made a similar move in 2007.

Many Asian stock markets have a midday break, including Hong Kong, mainland China and Malaysia. The United States in October started a two-year test that raised ticks for small-company stocks amid complaints from exchanges that liquidity had dried up.

Japan Exchange Group in 2014 said it was backtracking on tick cuts for some of the biggest companies, less than six months after it was implemented, because it failed to get the boost it sought.

SGX in 2015 cut the board lot size, or trading unit, investors needed to buy to 100 from 1,000 to help make higher-priced shares easier to invest in. Last year, it consulted on having at least 10 per cent of shares in the initial public offering of companies on its main board to boost retail participation.

A version of this article appeared in the print edition of The Straits Times on February 25, 2017, with the headline 'SGX may reinstate midday intermission'. Print Edition | Subscribe