Magnus Bocker not renewing contract; exit set for end-June

Singapore

MAGNUS Bocker is leaving Singapore Exchange (SGX), much the same way that he had joined in 2009.

When he was first headhunted to be the chief executive officer of SGX, Mr Bocker, who was coming to Asia to work for the first time, admitted that the offer "wasn't love at first sight".

On Tuesday, as SGX's board of directors announced that he would not seek to extend his contract after June 30, Mr Bocker will leave under circumstances that also cannot exactly be described as love.

The Swede is exiting amid widespread unhappiness over a moribund stock market, even though he has presided over a booming derivatives business that has diversified SGX's revenues in a time of rapid industry change.

"There is a time and season for everything, and it is now time for me to take on new challenges," Mr Bocker said in a statement on Tuesday.

SGX's board of directors said that it was assessing internal and external candidates for the post, and has hired executive search firm Spencer Stuart to help with the process.

SGX chairman Chew Choon Seng said in a statement that the board understands and respects Mr Bocker's decision. "We appreciate and thank Magnus for his contributions and leadership over an eventful and rapidly changing period, and wish him the best in his future endeavours."

Industry insiders contacted by The Business Times painted a mixed picture of Mr Bocker's tenure. They credited SGX's moves to launch popular derivatives contracts such as China A50 futures and commodities products. But they acknowledged challenges in the stock market, where brokers and remisiers have been struggling with declining trading volumes and a lack of investor interest, along with an increasing tendency to trade through online platforms that offer lower commissions.

"At the end of it all, you don't have big listings, you look at the top stocks, they are the same as a few years ago in terms of market capitalisation," said a senior broker who declined to be named.

But he wondered if Mr Bocker had also been frustrated by regulators in his efforts to grow SGX's business. He pointed to restrictions on the trading of exchange-traded funds (ETFs) by retail investors, as well as the lack of progress over the trading of callable bull/bear contracts, which are financial derivatives popular in Hong Kong but have yet to be launched in Singapore after a public consultation in 2010. "If you keep on getting your head bumped against certain things, you might get fed up, you might as well give it up rather than try a couple of years, and have people point fingers at you and say you didn't do a good job."

Others said that what SGX needs was a CEO who can connect to local stakeholder needs and restore investor confidence. A wave of corporate governance fiascos in S-chips after the global financial crisis, and more recently the penny stock crash of October 2013, hit investors hard, said Jimmy Ho, president of the Society Of Remisiers Singapore. "People simply don't have the money to play anymore."

Another unpopular move Mr Bocker pushed through was removing the 90-minute lunch break in 2011 to facilitate all-day trading to boost volume. He also received flak after a couple of recent trading disruptions.

Meanwhile, things came to a head when over 1,000 remisiers and investors wrote a letter on Jan 15 to appeal to Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam to help resolve a range of issues plaguing the industry.

David Gerald, CEO and president of investor lobby group Securities Investors Associations of Singapore, said: "It's only fair to say that he's done his best. It's not fair to blame one man for the woes of the market."

He suggested that a local take over SGX's helm - such as DBS chief executive Piyush Gupta, who had previously also been linked to the top job at Standard Chartered Bank. Mr Gupta was born in India but has become a Singapore citizen. "I'm sure he'd relate well with retail investors, brokers, remisiers," Mr Gerald said.

Esmond Choo, senior executive director of broker UOB Kay Hian, said that the biggest challenge for the new CEO was to bring liquidity back to the stock market, possibly through the Central Provident Fund system. "Every major market has retirement funds invested in the market in a consistent manner. Singapore doesn't have that. We hope the new CEO can convince the decision-makers."

Mr Bocker has been CEO of SGX since Dec 1, 2009, taking over from Hsieh Fu Hua. Mr Bocker was previously president of Nasdaq OMX and CEO of OMX before it merged with Nasdaq.

Other than growing SGX's derivatives, commodities and foreign exchange business, and investing S$250 million in a trading system called Reach, Mr Bocker notably tried to take over the Australian bourse ASX in 2010. The deal eventually failed in 2011 after fierce Australian political opposition.

BT understands that after his contract with SGX ends, Mr Bocker will be involved in his family's investments in Asia and will stay on in Singapore.