Uptrend in share-trading turnover at SGX

In the first half of the year, an average of 2.33 billion shares changed hands daily at Singapore Exchange, up 48 per cent from the same period in 2016. The average value of securities trades also grew 7 per cent to $1.2 billion a day in the first ha
In the first half of the year, an average of 2.33 billion shares changed hands daily at Singapore Exchange, up 48 per cent from the same period in 2016. The average value of securities trades also grew 7 per cent to $1.2 billion a day in the first half of this year.ST FILE PHOTO

Average value of securities trades grows; trading volumes up as well

The recovery in the technology and commodity sectors and a surge in bank and property stocks have helped push up share-trading turnover at the Singapore Exchange (SGX).

The average value of securities trades grew 7 per cent to $1.2 billion a day in the first half of the year, compared with the same period last year.

Trading volumes rose as well, with an average of 2.33 billion shares changing hands daily, up 48 per cent on the first half of 2016. This increase was due in part to the rise in the number of Catalist board listings.

Most regional bourses saw their average daily values decline last month, with Malaysia the biggest laggard. "Singapore has been outperforming other markets until June when we had a cyclical holiday slowdown," said Mr Chew Sutat, the SGX's head of equities and fixed income.

Still, Asian markets have generally done well despite rising interest rates and more geopolitical uncertainty.

For now, unease about a looming end to an era of ultra-cheap money has given way to optimism about global growth, with a stronger-than- expected United States non-farm payrolls report released last week boosting risk appetite.

CONSISTENCY COUNTS

The Singapore market is very consistent; volatility here is lower than in the rest of the Asian markets... Singapore is a safe market to extract value.

MR CHEW SUTAT, the SGX's head of equities and fixed income.

 

"Singapore is behind India, South Korea and Taiwan, but closely tracking Hong Kong in terms of total returns in US dollars," Mr Chew said.

"The Singapore market is very consistent; volatility here is lower than in the rest of the Asian markets... Singapore is a safe market to extract value."

Singapore has been a beneficiary of the technology industry's robust performance around the world, especially on the Nasdaq Composite in New York."The tech sector here was re-rated earlier this year. New tech stocks or those tied to data centres and hardware are also beneficiaries," Mr Chew said.

Tech listings usually tend to flock to Wall Street, "but if you're not a US$3 billion... to US$10 billion company, and are a business in Asia, it may not work to list there. That's because...your performance may be patchy," he added.

"There isn't a single market in Asia that is the technology market yet. Singapore has done it before in the tech cycles of the 90s.

"We are now working with new companies that are doing fund-raising here and working with the Infocomm Media Development Authority to better curate domestic private and public funding into IPOs. We are hoping some of these home-grown regional tech businesses will be another growth sector."

Reits and business trusts are another promising sector as these have been attracting listings from outside of Asia, Mr Chew noted.

And even with interest rates rising, he continues to see strong fund flows from insurance companies, pension funds and retail investors.

"In the first half of this year, existing Reits also used a re-rating of the sector to inject assets and raise capital," he added.

A version of this article appeared in the print edition of The Straits Times on July 12, 2017, with the headline 'Uptrend in share-trading turnover at SGX'. Print Edition | Subscribe