New SGX database may not boost retail participation significantly: Analysts

SINGAPORE – The Securities Investors Association (Singapore) has called on brokers to step up and provide more advice and training for investors.

This comes following the launch of SGX StockFacts by Singapore Exchange yesterday (Sept 22). The web portal is a comprehensive research database, covering stock fundamentals for all SGX-listed companies.

With the new SGX StockFacts, investors can search for stocks across 20 screening criteria, such as total market cap or price-to earnings (P/E) ratio. According to SGX, the new portal will help investors make more informed decisions, raise visibility of the companies and add vibrancy to the stock market.

Analysts said easier access to more information is definitely a plus, but investors still have some homework to do as the business environment evolves.

Said Mr Ng Kian Teck, deputy head of research at Voyage Research: “Investors need to bear in mind that those numbers are historical numbers. They may have one-off gains or losses which investors have to account for. Even if there aren’t such adjustments, investors have to realise that if something happened in the past, it does not mean it will happen going forward. The business model can change, the industry climate can change.”

Therefore, the Securities Investors Association (Singapore) hopes brokers can provide more advice to retail investors to spur retail participation in the stock market. It has also called on SGX to re-introduce independent stock research reports on investable companies on a regular basis.

Meanwhile, analysts said that SGX StockFacts, while helpful, may not boost retail participation significantly. According to advisory firm Financial Alliance, “the market needs to pick up steam” for that to happen.

Mr Sani Hamid, director of economy and market strategy at Financial Alliance, explained: “Retail interest in the stock market has to do with sentiment. The market has been meandering sideways for some time and that has contributed to a loss of interest.

“Providing more information is a good thing in terms of being more transparent and will result in more informed investors, but the market needs to pick up steam for retail participation to increase. It is still about performance.”

Said Mr Jimmy Ho, president of the Society Of Remisiers (Singapore): “StockFacts will offer greater convenience to the investors in terms of accessing information. But in terms of driving retail participation, the impact will be small.”

Analysts noted that apart from providing information, there is a need for more investor education programmes to encourage retail investors to see equities as part of a long-term play, where they can build a retirement portfolio.

CIMB Research added that the SGX and brokers can expand on their current investor outreach programmes and seminars, which will help to raise the confidence level of retail investors.

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