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43 mainboard companies to be placed on SGX watch-list

These companies either breached a minimum trading price requirement or failed to meet the financial entry criteria specified by SGX. 

SINGAPORE: A total of 41 mainboard companies will be placed on the Singapore Exchange’s (SGX) watch-list starting Thursday (Mar 3) because they do not comply with the minimum trading price (MTP) requirement of 20 cents per share for mainboard companies, the bourse said on Wednesday.

Additionally, two other companies will also be added to the watch-list on Thursday because they triggered the financial entry criteria, which entails pre-tax losses for three most recently completed financial years and an average daily market capitalisation of less than S$40 million over the last six months.

Before Wednesday, the watch-list already had 33 companies on it because they had triggered the financial entry criteria, SGX said in the news release. Of these, 16 were not compliant with the MTP rule.

Companies placed on the watch-list then have three years to carry out actions to improve their share price if they are non-compliant with the MTP, or improve their financial performance if they triggered the financial entry criteria, said SGX.

Head of Listing Compliance at SGX June Sim said companies placed on the watch-list should focus on improving their fundamentals and financial performance during this period.

"Putting these companies on a watch-list increases transparency for investors, enabling them to more easily monitor the companies they have invested in," she said.

Since the introduction of the watch-list effective March 2008, a significant number of companies were able to improve their financial performance and exit the watch-list, Ms Sim added.  

Meanwhile, the Securities Investors Association (Singapore) said that such a watch-list makes it easier for investors to monitor their investments.

Its president and CEO David Gerald said: "It’s an indication of the company’s financial position and its performance as well as its inability to maintain the required minimum price. That sends a signal to investors on the state of affairs and it puts a sense of urgency to the company to act.

"We need to maintain the quality in the market (and) we need to maintain the minimum price, for better governance and to give assurance to investors."

In a teleconference, SGX said it gives companies enough time to exit the watch-list should they meet the criteria.

Said Mr Chew Sutat, head of equities and fixed income at SGX: "It is of ample opportunity for companies to actually be able to come out of the watch-list, and past experience does show that about a third of watch-list companies eventually exit because they are able to meet the requirements they need to comply with."

According to SGX, the companies on the watch-list account for about 0.3 per cent of the mainboard market capitalisation, and 0.4 per cent of trading turnover.

SGX also gave an update, saying that a total of 69 companies were granted an extension till Sep 1 this year, to comply with the MTP requirement. These companies were given an extension as most had already started on corporate action to reach the MTP but either had not completed it yet or were affected by recent market volatility.