04 August 2014

2 Great News from Changes to the SGX Stock Market

I couldn't be happier with the latest announcements on the changes for SGX. There are several changes upcoming but I would single out two in particular: (a) the minimum value of a share will be 20 cents, and (b) the minimum lot size would be reduced to 100 (it's typically 1,000 today).

A Penny for Your Thoughts

With share prices requiring a floor of 20 cents, it means that many penny stocks would have to ante up to consolidate the shares to get above the minimum sum.

It's a real bugbear when you're trying to buy 50,000 shares at 10 cents a piece and somebody decides to sell you just 1,000 shares! On my gawd, that's only $100 in total and the sales charge alone add another $30 to it. Geez. [Palm slap face]

Wonder what's the impact for Qian Hu? Hmmm .....

100 is a Good Number

Then there's the minimum lot size. Some shares are trading at over $10 per share. Buying 1,000 shares today would require an outlay of $10,000. Worse are those Jardine family of shares, with many trading at several tens of dollars per shares. Takes a family fortune to buy anything.

Granted, I could try my luck buying from the "Unit Share" board on POEMS. But liquidity is just too low. Trying to get anything transacted is like balloting for a new flat in the good old days. Wait long long. But of course, not as bad as waiting to strike Toto.

With the latest changes announced, I look forward to getting my hands on Jardine Matheson Holdings (JMH) and Dairy Farm at some point in the near future. 100 shares of JMH at US$60 would still be a pretty hefty sum. But at least, it would be more within reach.

Would the greater accessibility cause these stocks to suffer increased volatility? It could work both ways.

Santa Claus is Coming to Town

The later change is actually detrimental to the earlier. 100 shares at 20 cents is $20. We really need to get to a minimum of $1 per share to make any sense. Alternatively, can sales charges drop even lower?

Looks like two of my X'mas wishes are coming true (Wish List for X'mas 2014). Three more to go. Got to believe there's a Santa Claus living in the North Pole.

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