SGX must tread carefully when expanding its research efforts

AS A commercially motivated frontline regulator, the Singapore Exchange (SGX) regularly finds itself in situations where its priorities are in direct conflict and where solutions are not straightforward. One particularly contentious area is research coverage of smaller companies, which is essential to help these firms gain investment attention but has been declining sharply in recent years as cost-conscious brokers have progressively focused their energies on the bigger firms.

Given that SGX derives revenue from trading and clearing fees, it is therefore in its interest that as many of its listed companies as possible are covered by investment houses since greater awareness should in theory lead to greate…