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MAINBOARD-LISTED companies that consolidate their shares before March 1, 2016 will have another six months to meet the minimum trading price (MTP), Singapore Exchange (SGX) announced on Thursday.
Companies that have carried out corporate actions such as mergers and acquisitions or reverse takeovers before March 1 can also seek a similar extension, which SGX will grant on a case-by-case basis.
The extension is an acknowledgement of current market conditions and public feedback, said the exchange, which noted that the FTSE ST All-share index has fallen 15.5 per cent in the six months to November 2015, with a decline of 4.9 per cent in November alone.
"This is to address market feedback that share prices post-share consolidation could be affected by challenging market conditions," SGX head of listing compliance June Sim said in a statement. "Investors should continue to monitor their investee companies and prod them to take action to comply, and more importantly, improve the long-term business fundamentals. Companies should likewise announce their plans to comply with MTP and actively engage their shareholders. Share consolidation alone may not be the only option."
Mainboard-listed issuers that do not receive the extensions will have to have a six-month volume-weighted average stock price of at least 20 Singapore cents on March 1, 2016. Issuers who fail that test will then have another six months, until Sept 1, 2016, to improve their share prices, or be placed on a watch list. Issuers on the watch list will have another three years to meet the MTP or face delisting.
The MTP was introduced in March 2015 as an attempt by SGX to improve the quality of the market and reduce the risk of excessive speculation in low capitalisation stocks.