SGX must get out of its bizarre state of denial

THE apology and explicit acceptance of responsibility from Singapore Exchange (SGX) chief executive Magnus Bocker for Wednesday's computer system breakdown was the first indication in many months that SGX is willing to concede that things are not at all right with many aspects of its business. Mr Bocker's statements that the exchange "takes full responsibility", that the breakdown "should not have happened" and that its priority now is "rebuilding trust" are in stark and welcome contrast to the bland apology issued for "the inconvenience caused"' when the system went belly-up for three hours on Nov 5.

Up till now as SGX came under fire from many quarters for the dismal state the local equities market has found itself in this year, it appeared to even the most objective observers that the exchange operated in a bizarre state of denial - it declared the market to be of sound quality when it has been widely described by investors, brokers and the media to be in bad shape. Those who sensed a loss of confidence among the retail investing public attributed part of the blame to investigation into the penny stock crash of October last year taking longer than usual.

But while it is true that the penny stock investigation is beyond the control of the exchange as it is in the hands of other regulatory authorities, it is hard to say the same of Wednesday's computer glitch, given that it was the second time in less than a month that the trading system went offline. It goes without saying that SGX's critics have had a field day with some very choice remarks posted on Internet chat forums, many presumably by those who have contributed to an earlier online petition for Mr Bocker to relinquish his position.