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HKEx’s large investor base not comparable with SGX’s

The report “HKEx is world’s largest exchange operator as SGX languishes” (April 15) paints an unfair comparison between the Hong Kong Exchange (HKEx) and the Singapore Exchange (SGX). It is like comparing an apple to an orange.

HKEx’s large investor base not comparable with SGX’s

Singapore Exchange Ltd. (SGX) signage is displayed inside the bourse's headquarters in Singapore, on Wednesday, Jan. 21, 2015. SGX posted its first quarterly profit growth in more than a year after a world-beating rally in Chinese stocks spurred demand for derivatives. Photographer: Bryan van der Beek/Bloomberg

The report “HKEx is world’s largest exchange operator as SGX languishes” (April 15) paints an unfair comparison between the Hong Kong Exchange (HKEx) and the Singapore Exchange (SGX). It is like comparing an apple to an orange.

HKEx supposedly serves Hong Kong only, but it is also linked to China via the Shanghai-Hong Kong Stock Connect and thus serves the greater China market as well. Investors can now trade between the two exchanges. Thus, HKEx can be considered to have a bigger hinterland, whereas SGX has none. HKEx has an investor base that is much bigger than that of SGX.

I do not agree with Mr Roger Tan of Voyage Research that SGX needs to undo some of the policies they have put in place recently, like the minimum trading price (MTP) policy. The MTP is a good move that will help the SGX shed the derogatory “Mickey Mouse” label that has resulted from the trading of “ultra-penny” shares. Many small-cap companies have consolidated their shares, and are no worse for it. How would removing the MTP improve the situation?

Removing the “trade with caution” alerts also would not improve the market. One can choose to ignore these and other alerts if one thinks they serve no purpose.

Mr Tan also suggested that SGX not play dual roles of market regulator and promoter, and instead concentrate on promotion. This authority lies with the Monetary Authority of Singapore (MAS). It would be good if MAS can set up an independent regulatory body, but this move alone is unlikely to add value to SGX’s performance or improve market confidence, as many have advocated.

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