SGX, put a stop to excessive share consolidation ratios

THE Singapore Exchange (SGX) urgently needs to review its key criteria for companies to consolidate their shares. It also needs to approve the ratios used for share consolidation and ensure no minority oppression is taking place.

The current exercise to rid the main board of very low-priced stocks is a laudable one but there are problems in implementation. For instance, no weight has been given to the underlying net asset value of a share; consolidation has to take place for any main board stock trading below 20 Singapore cents.

The SGX has also not taken on the responsibility of approving or at least guiding companies on consolidation ratios.