Minimum trading price seen working against share issuers, investors

Meeting the requirement may turn out to be distracting and costly for firms, and may result in odd lots for retail investors

Published Tue, May 5, 2015 · 09:50 PM

Singapore

THE Singapore Exchange's (SGX) new minimum trading price (MTP) rule could prove to be more bane than boon for both issuers and investors, analysts say, adding that many firms may be shying from a share consolidation for the moment because of uncertainty over whether it will work.

For firms, having to figure out the best way to meet the MTP could distract them from their business and saddle them with legal fees. And for retail investors, a share consolidation may leave many with odd lots or cancelled share fractions that they might not get paid for.

The MTP rule also leads to artificial selection based on an arbitrary 20-cent level, and may fail t…

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