Only 18% of investors rate SGX listcos’ disclosures as ‘very transparent’ despite quarterly engagements: study
Research by Stewardship Asia Centre also highlights a disconnect between investors and corporates on key priorities
[SINGAPORE] Transparency has emerged as a key concern among investors of companies listed on the Singapore Exchange (SGX), with just 18 per cent rating these firms as “very transparent” in a recent survey. Meanwhile, 69 per cent described them as “somewhat transparent”, indicating room for improvement.
This is despite more than 80 per cent of SGX-listed companies engaging with significant investors at least quarterly, the study by Stewardship Asia Centre (SAC), a non-profit think tank backed by Temasek, found.
Published on Tuesday (Oct 28), Stewarding Value: Unlocking Market Potential Through Engagement draws on surveys and interviews with more than 250 corporate leaders and institutional investors.
The report noted that “companies engage with investors for varied reasons – some see it as a channel to raise capital, others as a way to enhance branding and visibility, and still others treat it as a compliance obligation with little strategic intent”.
Meaningful engagement, however, is about transparency. This includes the amount, quality and timeliness of information that helps investors understand a company beyond its basic financials.
To build investor trust, the study recommended that companies raise their “transparency quotient”, which in turn can support long-term valuations.
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“Engagement that is transparent, consistent and anchored in long-term strategy builds confidence,” said Sunil Puri, senior vice-president and head of research and engagement at SAC.
Effective investor engagement
The report’s release follows comments made by Monetary Authority of Singapore (MAS) deputy chairman Chee Hong Tat last month at a conference organised by the Singapore Institute of Directors.
Chee, who is also minister for national development, said MAS partnered SAC to study investor-investee engagement in the Singapore market. He added that the findings would be used to develop practical guidance and templates to help companies communicate more effectively with investors.
The research also aligns with the objectives of the MAS equities market review group, which had identified improving listed companies’ shareholder engagement capabilities as a key lever for strengthening the Republic’s capital markets.
“As more firms embrace these practices, investor confidence will deepen; companies in turn benefit from increased liquidity and lower cost of capital.”
Ng Yao Loong, head of equities at SGX Group
SAC’s report reflects this, noting that six in 10 investors and corporations see room for improvement in company disclosures on strategy and risk.
This shared desire for greater transparency is particularly significant considering that nine in 10 investors and corporations agree that engagement affects valuation decisions.
While most describe the impact as “moderate” rather than “significant”, 95 per cent of investors said they were willing to tolerate short-term underperformance if companies communicate a clear and credible long-term strategy.
“This report is a timely resource for listed companies in Singapore, as it complements SGX’s ongoing effort to profile our issuers and increase investor engagement,” said Ng Yao Loong, head of equities at SGX Group.
He noted that the findings underscore how effective investor engagement serves as a strategic advantage for listed firms, rather than just a satisfaction of regulatory requirements.
He added that companies that communicate their long-term goals clearly and consistently, while making leadership more accessible, are better positioned to earn investor trust and harness their market potential.
“As more firms embrace these practices, investor confidence will deepen; companies in turn benefit from increased liquidity and lower cost of capital,” he said.
Differences in priorities
The SAC report also highlighted a disconnect between investors and corporates on key priorities.
While 25 per cent of investors ranked company strategy as their top concern, only 14 per cent of corporations recognise it as such. Conversely, corporations see dividends as investors’ main priority.
Similarly, 29 per cent of investors said they consider management vision and execution highly significant in shaping their investment decisions, yet just 16 per cent of corporations acknowledge this.
Such gaps may undermine the quality of dialogue, SAC cautioned in its report.
Despite this, both investors and corporations overwhelmingly agree on the importance of disclosing a long-term strategy. They also recognise that forward-looking plans provide a clearer understanding of a company’s value.
Investors, however, make up a slightly higher proportion of “strongly agree” responses compared with corporations, suggesting that companies may prefer a more cautious approach.
Engagement playbook
Alongside the report, SAC launched an engagement playbook developed with input from industry practitioners. It outlines practical “good hygiene” principles for investor relations, such as holding regular analyst briefings, ensuring leadership accessibility and enhancing digital disclosures.
Companies are encouraged to use the playbook to improve their engagement with investors and build long-term shareholder confidence.
SAC aims to help business and government leaders, investors as well as individuals activate steward leadership. Rajeev Peshawaria, the non-profit’s chief executive officer, said: “Steward leadership, as we define it at SAC, is the genuine desire and commitment to create a collective better future for stakeholders, society, future generations and the environment.”
He hopes that “SGX-listed companies will see the playbook as a useful tool in strengthening trust, transparency and long-term value creation”.
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