SGX, a state of denial

The Incredible Shrinking Singapore Stock Market – by Bloomberg
 
For the last five years, delistings have outnumbered listings. Does it matter? Not as much as you might think. By Livia Yap and Tom Redmond 12‎ ‎February‎ ‎2019‎ ‎
 
Robson Lee had a decision to make. In his more than two-decade career as a capital-markets lawyer in Singapore, he’d helped more than 30 companies list on the country’s stock exchange, bringing to market everything from a grocery store chain to a pawnbroker. Business had been good, but it was starting to dry up. Lee decided he had to get out. “I saw the decline,” he says. “That’s why I moved.”
 
That was in 2014, when more companies left the Singapore Exchange than joined it, with S$8.4 billion ($6.43 billion) in value disappearing from the public market….
 
The exchange’s fortunes have only gotten worse. For the last five years, delistings have outnumbered listings in the market, which had 741 companies at the end of December last year, down from a peak of 782 in 2010. In 2018 the money raised from the 15 SGX initial public offerings, excluding depositary receipts, fell to just S$710.6 million, while 19 companies departed—a net outflow of S$19.2 billion in market value. …
 
Many of the businesses that have left the exchange in the past few years are well-known in Singapore. They range from GLP Pte., one of the world’s biggest warehouse owners, to Osim International Pte., Asia’s largest maker of massage chairs. …they see as low valuations in the city-state, are seeking more liquid markets that can generate higher stock prices. For example, Lee says, sofa maker Man Wah Holdings Ltd. was taken private in September 2009. Within six months, it was relisted in Hong Kong at about eight times its market value….


The dying Singapore stock market has been staring in the face of the govt, MAS and the SGX. The above Bloomberg article only confirmed what is going on. But no one seems to be perturbed by this sorry state of affair. Either they are in a state of denial or just did not know what to do next. And often they were trying to explain away the problem by pretending that it is ok, normal to be in decline, and some even pretended that this was good. Think of Ah Q mentality.
 
When would they wake up and face the truth and seriously do something before it is too late? Admittedly Singapore is a small market and cannot compare with the advantages of Hong Kong and even neighbouring SE Asian markets. But to spout nonsense like it is normal for more delisting than listing is telling like when other markets, especially Hong Kong, are getting more listings than delistings. The SGX has now been overtaken by Thailand and Vietnam.
 
The quality of listings here, as mentioned in the first paragraph, are petty companies that were good enough for Sesdaq or Nasdaq equivalent while the prized and highly valued companies gave this island a miss. Does this say anything? The days of grabbing all kinds of shitty companies to list here were wasted opportunities for not defining the role of the stock market and finding a niche market instead of trying to be big just for being big’s sake and ended becoming a rubbish dump. Not forgetting the billions that small investors have lost when these unaccountable, untouchable and unable to control companies just delist or just let the stock values go to nought. They don’t care about their listings here, where there is any value or no value.
 
Now the market is filled with many worthless little super penny stocks that only help to undermine the quality of the market and affect the valuation of otherwise quality companies. Good companies are delisting and bad ones remained or wanting to come in because no one wants them.
 
Whither the stock market without a clear vision and mission and with a pretentious ambition of overtaking Hong Kong as the choice market in Asia? More dangerous derivative trading is going to run this sinking ship aground. Running out of ideas and hibernating in a cocoon, not wanting to see the truth would only expedite the death of this stock market. Its existence today is like a child in ICU and everyday is a bonus.