Flurry of corporate activity puts SGX to the test

IN A market plagued by poor volume and low volatility, credit has to go to the local corporate sector for keeping interest in equities alive with regular announcements of takeovers, rights issues, joint ventures, asset consolidations, signing of memorandums of understanding and placements. Such deals have often had a positive impact on sentiment and with trading conditions as weak as they are, anything that helps keep interest in local stocks alive is to be welcomed.

However, increased corporate activity adds to the challenges that the regulators face in treading a fine line between protecting investors' interests and not stifling those of companies.

Consider, for example, the case of a potential takeover. There have been instances of companies announcing that heightened interest in their shares is probably because talks are underway that could lead to a takeover. The announcements invariably include a qualifier that because of the need for confidentiality, no names can be mentioned, no prices can be quoted and no guarantees can be given.