DBS tops trades in smaller board lots on debut of revised SGX framework

[SINGAPORE] At the debut of reduced board lot trading on the Singapore Exchange (SGX) on Monday (Oct 5), 10-share lots emerged as the most commonly traded among a majority of actively traded stocks – led by DBS with about 5,000 such trades.

The bourse had kicked off the week trading in smaller lots for an initial cohort of 11 stocks. This reduced the minimum ticket size for the three local banks DBS, OCBC and UOB , Great Eastern Holdings , Haw Par Corporation , (previously Jardine Cycle and Carriage), Jardine Matheson Holdings (JMH) , Keppel , Prudential , SGX , and Venture Corporation – from 100 shares to 10.

Over 20,000 trades were executed in 10-share lots among the 11 stocks, exceeding the more than 13,000 trades executed in 100-share lots, going by Bloomberg trade data analysed by SGX.

The data showed JMH recording the strongest adoption on the day, with around a third of its trades executed in 10-share lots and a median trade size of 20 shares.

Twenty-share lots were the second most popular trade size for DBS and JMH.

DBS and JMH are the highest-priced among the 11 stocks selected for reduced board lot trading. Shares in Singapore’s biggest bank closed Monday at S$78.56, up 0.9 per cent, while JMH ended 2.1 per cent higher at US$57.19.

Among the 11 stocks, just over half (55 per cent) of trades on Monday were executed in trade sizes below the previous 100-share board lot, said SGX.

Keppel was the exception, with around 1,000 trades executed in both 100-share and 10-share lots.

The move to reduce board lot sizes was aimed at enhancing both accessibility and trading flexibility of higher-priced securities, so investors can build and adjust positions in smaller increments.

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“This provides greater flexibility to stage entries, average costs, rebalance portfolios and manage capital deployment more precisely,” said a statement by SGX on Tuesday.

“For example, an investor seeking a 100-share position in DBS on Monday could have accumulated that position through multiple 10-share transactions over the trading day rather than a single 100-share trade,” said SGX.

As at Monday, eight of the 11 stocks with reduced board lot sizes recorded a higher average daily turnover than on Oct 2, the last trading day of the preceding week.

They were Prudential, Venture Corporation, Jardine Matheson South-east Asia, SGX, Keppel, UOB, JMH and Haw Par Corporation, the data indicated.

“Liquidity…(has) remained broadly stable despite softer market-wide trading activity, with the majority of constituents recording higher turnover (during this) period,” the bourse said.