Can MTP work for Singapore's stock market?
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HAVING gained consensus among its review committee members after the publication of a consultation paper, the Singapore Exchange (SGX) and the Monetary Authority of Singapore (MAS) have decided to go ahead with the decision to implement in March 2015 a minimum trading price (MTP) of 20 cents for each share .
The implementation of the MTP aims to address excessive speculation and potential market manipulation.
But there are potential problems with an MTP regime. Take, for instance, Singapore eDevelopment Ltd. Its theoretical consolidated price is about 17 cents. However, it is currently trading at 11 cents because there has been no change of fundamentals.
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