It is aimed to facilitate greater retail participation.
Singapore exchange announced that it will be mandating all
mainboard IPO companies to allocate at least 5% of $50m, whichever lower, to
retail investors.
According to Chew Sutat, SGX's Executive Vice President and
Head of Equities and Fixed Income, the introduction of the minimum IPO
allocation is aimed at facilitating greater retail participation in Singapore’s
equities market. The new rules on the minimum allocation are effective May 2,
2017.
"Retail investors are important participants in the
Singapore markets and giving them access to at least 5% of each Mainboard IPO
will encourage more to consider equity investing. If market conditions permit,
we encourage companies to make available more shares than the floor to retail
investors,” he said.
He added, “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.”
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