The Role Of An Exchange


Jenny Chiam, Head of Securities, SGX
Today’s world is globally connected and money can flow anywhere whether you are a retail or institutional investor. This is a challenge for the smaller exchanges where growth is linked somewhat to size of the economy and the growth potential. Cutting prices does not necessarily mean more interest in your market. As I mentioned on the panel there is a critical mass of liquidity and the immediate focus for SGX is to improve the cost of trading by reducing market impact costs. The key objective of the introduction of market makers into our cash market is to help lower the cost of trading for our investors overall. Australia and Japan have seen competition come in but the entry of competition occurred at turnover levels that are multiples of SGX today. Pricing should and will be adjusted where it make sense for a product development strategy.
The retail investor in ASEAN is increasingly tech savvy and upwardly mobile and seeking opportunities in their home market, within ASEAN and globally. It is hard to quantify as trading flows tend to go via the various broker intermediaries in the respective ASEAN countries but we do see more engagement and interest especially through our educational efforts to improve financial literacy overall. All the ASEAN exchanges have stepped up their educational efforts to encourage the public to own businesses via stocks and improve capital formation; the fundamental role of an exchange.