Mon, Feb 27, 2017 - Page 15 News List

SGX mulls reinstating lunch breaks

Bloomberg

Singapore stock traders might finally get their lunch break back.

Singapore Exchange Ltd (SGX), which runs the city-state’s equity market, is considering reinstating the mid-day intermission, according to people familiar with the matter.

SGX in 2011 scrapped the break, which lasted from 12:30pm to 2pm every day, in an effort to boost trading.

The bourse is expected to have a public consultation on the issue in the coming weeks, the people said, asking not to be identified, as the information is private.

SGX would also propose a test that would widen the price increment at which shares are quoted to bring day traders back, according to the people.

When SGX cut the mid-day break, then-chief executive officer Magnus Bocker said in January 2011 the move would make Singapore “one of the most accessible markets in Asia and in the world.”

Having continuous trading from 9am to 5pm could also boost volume by as much as 10 percent, Bocker said.

The daily average value of shares traded on SGX this year has risen 6.4 percent, to US$809 million, compared with the average for last year, according to data compiled by Bloomberg.

While up from last year, it is down from the US$1.12 billion-a-day the market saw in 2013, the data show.

SGX said in an e-mailed response to queries that it does not comment on speculation.

The exchange’s tick-size proposal would reward brokers for making markets in less liquid stocks by widening the spread they earn when buying and selling shares, the people said.

That could encourage trading in small-cap companies, they said.

If the plan goes ahead, it would be at least the third time in a decade that SGX has tweaked stock spreads. In 2011, it cut tick sizes to offer what it called “one of Asia’s most cost-competitive trading environments.” It made a similar move in 2007.

SGX in 2015 cut the board lot size, or trading unit, investors needed to buy to 100 from 1,000 to help make higher-priced shares easier to invest.

Last year, it consulted on having at least 10 percent of shares in the initial public offering of companies on its main venue to boost retail participation.

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