Institutional investors 'could lead the way back to confidence in S-chips'

Wary retail investors could regain their interest in scandal-hit S-chips if institutional and large investors show the way forward, said an OCBC Bank investment banker on Monday.

This comes even as a framework between Singapore and Chinese regulators announced last week raised the possibility of more S-chips, or Singapore-listed China stocks.

"The retail (investors) suffered because of the past incidents, but interestingly we are getting more and more enquiries from institutional funds" about China firms, said Ms Tay Toh Sin, head of corporate finance at OCBC Bank.

She noted at a briefing that H-shares - or China stocks listed in Hong Kong - have performed well recently.

"Everybody is looking for North Asia to outperform South-east Asia," she said.

"The retail (investors) will take the cue from the big boys. If the large institutional (investors) start to look at that space, the retail will follow."

There are about 140 S-chips and many of them made their debut in the boom years before the 2008 global financial crisis.

But the crisis unveiled shocking accounting and governance failures at many of these companies, decimating investor confidence in the sector.

Last week, the Singapore Exchange said it would collaborate with the China Securities Regulatory Commission (CSRC) to vet new listings, which could attract more mainland firms here.

Ms Tay raised the possibility of regulators here raising the issue with CSRC and working with them if there are any more S-chip scandals.

"There is at least a formal channel. Whether it's effective or not, it's yet to be seen - nothing is legally enforceable - but at least it provides a certain framework and mechanism."

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