SGX to reduce board lot size for securities above S$10

[SINGAPORE] Those investors who have been toying with the idea of adding blue-chip stocks to their portfolio but have been put off by their prices may now be able to get a piece of the action.

The Singapore Exchange (SGX) announced on Wednesday (Nov 19) its intention to reduce the board-lot size to 10 units from 100 units for securities priced above S$10.

This reduction will apply to ordinary shares, real estate investment trusts, business trusts, company warrants, rights and depository receipts.

This significantly lowers minimum investment requirements – broadening investor participation, boosting trading activity and enabling easier access to higher-priced securities so investors can build more diversified portfolios, said the local bourse.

The move is part of a slew of new measures proposed by the Monetary Authority of Singapore (MAS) Equities Market Review Group in its final report.

The group said that it was supportive of moves to make trading more efficient, while making it easier for investors to access the market. The board-lot change will complement other efforts to reduce friction and strengthen the attractiveness of Singapore’s equities market.

Securities currently trading above S$10 include bank stocks such as DBS, UOB and OCBC, Haw Par Corporation and Jardine Cycle & Carriage.

Take DBS shares for example: The counter closed at S$53.70 on Wednesday. With a standard board-lot size of 100 units, investing in the bank would require a sum of more than S$5,300. A board lot size of 10 units will make it a more affordable S$537.

Back in January 2015, the standard board-lot size of securities listed on SGX was reduced to 100 units from 1,000.

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MAS will establish an Equity Market Implementation Committee – co-chaired by its managing director Chia Der Jiun and SGX chief executive Loh Boon Chye – to oversee the implementation of the review group’s measures. Details will be announced in the first quarter of next year.