S'pore bourse performance raises questions

ONE of the hallmarks of a strong economy and financial market is a vibrant domestic equity market. Not just because of its fund-raising capability, but also its investment function. But the performance of the Singapore bourse has raised concerns within local financial circles, and here's why:

The average value of shares traded on the Singapore bourse has fallen 40 per cent to about S$1.06 billion in the first two months of this year from S$1.77 billion a year earlier, according to data compiled by Bloomberg. This compares unfavourably to the 11 per cent fall in transactions in Hong Kong in the same period, while those on Japan's Topix index increased 17 per cent.

Meanwhile, the benchmark Straits Times Index has trailed its major developed-market peers in the past 12 months and has been flat this year. The total return on the FTSE ST All-Share Index is down 2.5 per cent year on year. And despite numerous initial public offerings, the market capitalisation of the Singapore bourse is down almost 4 per cent year on year. This is despite Singapore Exchange's (SGX) attempts to boost market activity via measures such as extended trading hours and the move to encourage more retail investor participation. All this has also been bad news for the people at the epicentre of the market - stockbrokers.