The Singapore Exchange (SGX) says it will release more details of the new index on Sept 22.
The statement, sent later on Sept 12, came after Minister for National Development and deputy chairman of the Monetary Authority of Singapore (MAS), Chee Hong Tat, announced that the bourse will launch a new index tracking companies outside of the Straits Times Index (STI) at the Singapore Institute of Directors’ (SID) directors conference on the same day.
SGX Group's head of equities, Ng Yao Loong, said that the group is "committed to doing its part by equipping listed companies with the necessary tools and resources to enhance shareholder value, and enabling investors to make confident and more informed decisions".
Noting that sustainable growth in the local bourse is "in [a] large part" dependent on Singapore's listcos unlocking value, Ng also notes that the transformation requires a "collective effort across the ecosystem". "Our initiatives are mutually reinforcing: stronger corporate value enhancing practices generate greater visibility, while recognition through index inclusion motivates better performance. Together with transparent disclosure, these efforts will make listed companies – especially those beyond the STI – more visible to institutional and retail investors alike," says Ng.
On Chee's point about communication, Tan Boon Gin, CEO of Singapore Exchange Regulation (SGX RegCo), says companies must "engage with investors better" in a bid to "complement corporate actions and financial management that unlock or increase shareholder value".
"More institutional capital is entering the market. Companies that want to be noticed and rewarded for having quality management and business strategies must proactively communicate their outlook and strategies to provide forward-looking guidance," he adds. "This allows investors to take such decision-useful information into consideration and ascribe the right valuations to these companies. We intend to consult the market on whether companies should be required to disclose policies such as dividend and investor relations. This is how we collectively raise the bar in line with global best practices.”
See also: SGX to launch new index that tracks companies beyond STI: Minister Chee Hong Tat
Chew Sutat, Protem chairman of SGListCos and former SGX executive, says SGX's push for meaningful investor communications is "timely" as interest in small- and mid-cap stocks is accelerating. "While some listed companies are already making strides in enhancing shareholder value and articulating their strategies, it is imperative for all listed companies to step up to tap on this momentum," he adds.
