Improving the local stock market's health: Rebuilding confidence is key

THE state of the local stock market has once again come under attention, with recent calls for the authorities to take steps to improve its health. The reasons cited include low liquidity, underperformance relative to major equity benchmarks, and persistent undervaluation - factors that have led an increasing number of good companies to delist and depart the public sphere.

The latest appeal for action came from the Society of Remisiers (SOR) in a letter to the media that carried recommendations on what could be done to lift interest in local stocks. These include increasing the limits for use of Central Provident Fund (CPF) money for investing while tightening the criteria for CPF inclusion; listing of large government- or Temasek-linked companies (GLCs or TLCs) like PSA, Changi Airport Group, Mapletree Investments and Surbana Jurong; and the reinstatement of quarterly reporting.

It was not the first time that retail brokers have gone public with their concerns - in 2015, some 1,225 remisiers signed a petition to then deputy prime minister Tharman Shanmugaratnam, seeking action to quickly resolve issues plaguing the local market, among them waning confidence within the retail investment community.