S\\\'pore exchange struggles to grow as rivals thrive

A dearth of big-name share listings of overseas firms and a multi-billion-dollar penny-stock crash have hampered the growth ambitions of Singapore’s stock exchange as Asian rivals flourish, analysts say. Singapore Exchange Limited (SGX), the sole stock market operator in the city-state, on April 23 reported that net profits slumped 22.4 per cent year-on-year in March, as total securities trading volume fell 47% in the same period. That, market observers say, highlights the bourse's main problem – soft volumes, which make it less attractive for fresh share offerings from around Southeast Asia. To compound its woes, sentiment was hit when three penny-stock companies – Asiasons Capital, LionGold Corp, and Blumont Group – suffered a rout in October that wiped around Sg$8 billion (US$6.4bn) from their value in two days after a huge rally. In a statement accompanying its latest earnings report, SGX said despite continuing weakness it is ‘confident that the securities market will recover over time and we remain committed to our long-term strategies’. While its major players include state-linked firms such as Singapore Telecom, DBS Bank and Singapore Airlines, the bourse says 40 percent of its listed companies are foreign. But Desmond Chua, a Singapore-based market analyst at trading firm CMC Markets, said ‘low market volatility for some time now and slowing number of initial public offerings (IPOs)’ have hurt the exchange, according to AFP.