SGX, take a leaf or 2 from other bourses

WHEN looking at ways to enhance disclosures in the Singapore stock market, it is often instructive to study practices in other stock exchanges to see if any can be adopted for the local bourse. One useful suggestion came from a BT reader a fortnight ago.

In a letter to the paper, the reader proposed that the Singapore Exchange (SGX) follow the Indian authorities and disclose for each stock the proportion of trading that involves shares for actual delivery. If adopted, this would offer investors a more accurate picture of the true demand for a counter as the volume for actual delivery would exclude all speculative activity, particularly contra trading.

With such information, investors can gauge the level of speculative activity at any one time in any one stock before they make their investment decisions. An enhancement to this might be to show the amount of volume generated by proprietary traders since these parties typically enjoy lower brokerage fees and therefore hold an important cost advantage over average retail players.