SGX move to cut board lot size expected to boost investor interest, liquidity: Observers

SINGAPORE – A move by the Singapore Exchange (SGX) to reduce board lot sizes is expected to make blue-chip stocks more affordable for retail investors.

Observers told The Straits Times that the change – which will reduce the board lot size from 100 units to 10 units for securities above $10 – will also broaden investor participation on the SGX and boost liquidity.

A board lot is the standard minimum number of shares you must buy or sell in a single transaction on an exchange.

The move is part of a slew of measures proposed by the Monetary Authority of Singapore’s (MAS) Equities Market Review Group in

its final report released on Nov 19

.

SGX will consult on the proposal to reduce the board lot size of higher-priced securities, while keeping existing free float requirements, in the first quarter of 2026.

Mr Paul Chew, head of Phillip Securities Research, said the change could make it cheaper to invest in blue-chip stocks, provided their share price remains above $10 at the time the new rule is implemented.

Some examples of stocks trading above $10 at the time of writing include bank stocks such as DBS Bank, UOB and OCBC Bank, as well as Jardine Cycle & Carriage and Venture Corporation.

“If the rule is approved and DBS’ stock price qualifies, the minimum investment would be significantly reduced. Reducing board lot sizes widens investor participation by making shares more affordable.”

Mr Isaac Lim, chief market strategist at trading platform Moomoo Singapore, said the move was a “long time coming”.

He noted that the most expensive counter on the Straits Times Index – Jardine Matheson Holdings – currently trades at about US$63 a share, which means that with the current standard lot of 100 shares, an investor would need about US$6,300 to take a position in the stock, before administrative fees.

“For younger investors who have just entered the workforce and are looking to build up their portfolio, this will more often than not be out of reach. When the changes are implemented, this would greatly bring the purchase cost down to just US$630,” said Mr Lim.

“For long-term investors and even younger investors looking to start out, this will definitely encourage them to trade and to invest, driving trading volume and revenues.”

Mr Matthias Chan, head of equities research at SAC Capital, said the move will broaden investor participation, especially in larger-cap companies.

He added that for less popular, poorly traded large cap counters, reducing the lot size can also help boost liquidity.

“If the board-lot bar is lowered to encourage buying, the counterparty offer will naturally follow. For a healthy equities market, the entire market cap spectrum should enjoy lively trading,” Mr Chan said.

Other observers warn that while shrinking the board lot size will encourage younger investors with less capital to invest on the SGX, it is not a silver bullet.

Mr Shane Chesson, vice-chairman of the Singapore Venture and Private Capital Association, said board lots are a “fairly old-fashioned concept”.

“Breaking board lots down may help marginally, but having exciting new companies in sectors people can relate to and trade will do far more to engage younger investors,” he said.

Mr Vasu Menon, managing director of investment strategy at OCBC, added that the availability of research and stock information will be key to sustaining investor confidence and keeping them interested in the local market.

“We want to ensure that investors make informed decisions, so while addressing some of the technical factors will help, providing information research on small to mid-cap companies is quite critical for individual investors – especially retail and young investors – to make prudent and good decisions,” he said.

On this front, MAS on Nov 19 also announced enhancements to the Grant for Equity Market Singapore scheme, which was introduced in 2019 to support listings and expand the equity research ecosystem here.

This includes additional funding of $1,000 for each research report generated from participating research houses.

A further $1,000 will be awarded if the report is an initiation of research coverage or covers pre-IPO and newly listed companies, as well as companies that take up the new Elevate Grant.

The Elevate Grant offers up to $200,000 per listed company to co-fund professional services, including the engagement of consultants in investor relations, corporate strategy or financial management.

MAS also said that research houses will receive grant support of up to $4,000 to defray the costs of dissemination through digital media. This aims to broaden eligible dissemination channels and forms of published research, including through social media platforms.

The regulator said this can help to increase the coverage of Singapore-listed companies and make the published research more accessible to younger and digitally native investors through new content media such as video summaries and infographics.

Research on private companies with a strong local presence will also be eligible for funding, as such coverage helps investors better understand firms’ business models, financial performance and growth potential. 

Meanwhile, MAS and SGX will roll out incentives and grants to bolster market makers’ capabilities, with a focus on newly listed firms and next-tier small- and mid-cap stocks outside the Straits Times Index. More details will be announced in the first quarter of 2026. 

Market makers provide liquidity by always being ready to trade, narrowing bid-ask spreads and reducing price swings.

Mr Abdullah Armain, a data science and economics student at the National University of Singapore and an investor on the SGX, said that he is “quite excited” about the changes.

“Better market-maker support and smaller board lots feel like real upgrades to how our market works day to day – smaller lots make it way easier for younger or newer investors like me to get in without needing to drop a few thousand upfront,” he said.

“And for small- and mid-cap companies, this could finally fix a longstanding issue where solid names have traded at stubborn discounts simply because liquidity was thin, and price discovery was poor. If these tweaks can tighten spreads and bring more participation, it might finally unlock fairer valuations.”