At least 5% of SGX mainboard IPOs to be set aside for retail investors

At least 5% of SGX mainboard IPOs to be set aside for retail investors

All mainboard initial public offerings (IPOs) will have to allocate 5 per cent of their stock offering, or S$50 million, whichever is lower, to retail investors, says the Singapore Exchange (SGX).

SINGAPORE: Starting May 2, all companies aiming to list on the Singapore Exchange’s (SGX) mainboard will have to set aside at least 5 per cent of their stock offering - or S$50 million, whichever is lower - for retail investors.

The new rule is aimed at having greater retail participation in Singapore’s equities market, the exchange operator said in a press release on Wednesday (Mar 8).

“Retail investors are important participants in the Singapore markets and giving them access to at least 5 per cent of each mainboard initial public offering will encourage more to consider equity investing,” said SGX's executive vice-president and head of equities and fixed income, Chew Sutat.

“If market conditions permit, we encourage companies to make available more shares than the floor to retail investors,” added Mr Chew.

Mr David Gerald, CEO and president of the Securities Investors Association (Singapore), said the move is a “step in the right direction”.

“This initiative provides individuals, especially newcomers, with more choice when considering ways to diversify their savings,” he said.

SGX received formal feedback from 20 respondents via the public consultation which ended in March. Informal engagements with stakeholders were also held to gather feedback, the exchange operator said.

“We recognise that market forces are dynamic and will continue to monitor the public subscription trends of IPOs to ensure that the minimum allocation amounts are appropriate for the Singapore market,” said Mr Chew.

Source: CNA/sl