Review wave of delistings on SGX

I applaud the attempt by the Singapore Exchange to improve the local stock exchange’s liquidity by reducing board lot sizes. (“Muted response to smaller board lot sizes on SGX”; Jan 20)

The SGX should also pay attention to the increasing privatisation of SGX-listed companies. Over the past six years, an average of 27 companies have been privatised or delisted for various reasons.

Investors have lost the opportunity to invest in big household names such as Asia Pacific Breweries, Cerebos Pacific and Robinsons.

The original intention of establishing a stock exchange in a country is to develop local industries by allowing them an avenue to raise capital through the issue of shares to the public.

In the not-so-distant past, being a listed company was prestigious, affording the company a better standing among customers, suppliers and creditors. Nowadays, however, companies have found listing to be a hindrance and a compliance cost.

For example, the reasons CapitaLand cited for privatising CapitaMalls Asia last year said essentially that listing was hindering business development. SGX must return to the first principles for having a stock exchange and promote local industries.

It must find out why listed companies are rushing to be privatised and rectify these concerns.

It must also work with relevant government agencies to identify promising local companies that need capital for expansion and encourage them to list.

Only then can SGX retain and attract good companies and compete with other stock exchanges around the world for investors’ attention. Local industries would also get a boost from this development.

To this end, I suggest that Temasek Holdings encourage its companies to spin off promising subsidiaries to boost our status as Asia’s financial hub.