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KGI upbeat on S’pore despite lull

SINGAPORE — While sentiment in the share market here continues to be cautious and liquidity remains low, Taiwan’s second-largest brokerage KGI Securities is confident that Singapore will retain its position as an important capital market in the region.

SINGAPORE — While sentiment in the share market here continues to be cautious and liquidity remains low, Taiwan’s second-largest brokerage KGI Securities is confident that Singapore will retain its position as an important capital market in the region.

Key KGI executives said yesterday that incidents such as last October’s S$8 billion penny stock crash are part and parcel of the development of a stock market, adding they were optimistic that conditions here would improve after regulators proposed moves to revamp share trading.

“I don’t think there’s a lack of liquidity in Singapore. It’s just that investors get very cautious after what has happened (with the penny stocks). But I think cutting the lot sizes from 1,000 to 100 stocks is a very good idea; now people with smaller budgets have access to better stocks,” said Mr Reddy Wong, chief executive of KGI Asia.

“Singapore investors are relatively sophisticated and the Government has been very proactive in implementing the changes slowly so investors have time to adjust. So we’re not concerned. I think the Singapore market will revive … I believe in the next two to three years, it will.”

Mr Paul Yang, president and chief executive of KGI’s parent China Development Financial Holdings, said Singapore is not the only market experiencing a fall in liquidity. “If you look across the globe, it’s also happening in Hong Kong, China and even the United States. A lot of that has to do with investors buying and holding, especially with the high-yielding stocks.”

Mr Yang said the current lull would not affect KGI’s plans to expand here. Just last week, the company entered into an agreement to buy AmFraser Securities for S$38 million, only four months after completing its acquisition of futures brokerage firm Ong First Tradition.

One of the factors supporting growth in this region is the flow of funds from North Asia, as manufacturers relocate parts of their operations to more cost-competitive markets such as Vietnam, Thailand and Indonesia.

“When you think about South-east Asia, you got to be here in Singapore, not only because it’s a major capital market and wealth management centre … We also want to tap the talent pool of Singapore,” Mr Yang said. LEE YEN NEE

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