Paid research: should SGX bother?

IT'S 15 months since the Singapore Exchange's (SGX) most recent research initiative known as SERI ended in June last year. According to the exchange's website, it is still "reviewing all options to enhance the level and type of research coverage for its listed companies".

SGX may well decide (after its long- drawn review) to completely withdraw from any involvement in research coverage. This would not be a bad idea, considering that the funding and conflict-of-interest issues which plague any form of paid research programme had already relegated SERI to a minor (and possibly even unimportant) role in the minds of the investing public. For instance, how many brokers and retail investors know what SERI stands for? Or, for that matter, how many companies were under its coverage? (Answers: it's SGX's Equity Research Insights; and, when it ended, there were 49 firms covered.)

Not only did SERI suffer from low investor awareness, but in order to overcome claims of bias, it only required its sole provider for the 45 firms in its Structured Module, Standard & Poor's (S&P), to produce essentially company information sheets with no investment recommendation.