THE Singapore Exchange's Minimum Trading Price policy which is forcing mainboard-listed companies to consolidate their shares to remain listed on the mainboard is causing a lot of pain and distress to the companies as well as the long-suffering shareholders of these companies.

The SGX has said that this 20-cent MTP policy will "boost the local stock market's quality" and that the higher-priced shares will have better liquidity.

Unfortunately, this is not the case. On the contrary, neither the quality of the market nor the liquidity has improved as can be seen from the companies that have recently consolidated. In fact, the liquidity has been sapped further as investors are less accustomed to the higher prices and are less willing to invest in these companies.