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A ballpark estimate is that the SGX-listed China sector is down at least 80 per cent from their highs, a massive underperformance that only lends weight to the criticism that China companies who choose to list here are mainly - not entirely - of sub-standard investment grade.
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THis is a warning to singapore. Seen on a broader scale , when it can only attract 'FT' of substandard levels as genuine FT seek to avoid NS . The entire island will collaspe together with the substandard stocks in SGX.
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Weekly Market Report
'The truth, the damned truth... and statistics'
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SINGAPORE - Mark Twain once wrote 'there are three kinds of lies - lies, damned lies and statistics'. (It was actually former British prime minister Benjamin Disraeli who coined the phrase but it was Twain who popularised the notion that statistics can be used to tell lies).
True, we've all seen how numbers can be used to sway an argument (or get clients to buy) even when those arguments may have been flawed to begin with. Unfortunately for the Singapore stock market, the numbers don't lie.
There are 787 listed entities on the Singapore Exchange (SGX), excluding warrants. Of these, a staggering 658 or 84 per cent trade for less than $1 which puts them in the penny category.
It's a good thing that SGX does not have a rule similar to Nasdaq's, which is that a company whose shares trade below US$1 for 30 consecutive business days faces the threat of delisting.
(They are given 90 days grace to ensure compliance, though in times of extreme stress, such as 9/11, the rule can be temporarily suspended).
If SGX had a minimum-price continued listing rule, then more than 80 per cent of the Singapore market would vanish.
Think about this - despite all the attempts by SGX and the authorities to elevate the local market into the realm of the extraordinary, only 16 per cent of the local stock market can justifiably claim to be non- penny stocks.
Of course, you'd have to factor in that we're in the midst of a bear market, so perhaps some allowances should be made. However, the picture doesn't get much better the lower the penny barrier - if we accept 50 cents as separating penny stocks from non-penny stocks, the proportion which trades for less than 50 cents is still a high 72 per cent.
Finally, set the penny hurdle rate at the minimum allowable initial public offer (IPO) price of 20 cents and the percentage that trades for 20 cents or less is a shockingly high 47 per cent.
Even Mark Twain wouldn't be able to deny that whichever way you cut it, Singapore's is a penny stock market.
The next question an interested party might ask is: what of the much-vaunted China segment which was supposed to drive the market to greater heights?
Here too, the figures are disappointing. There are 50 China stocks that form the FTSE ST China index and only four sell for above $1, which means 92 per cent of SGX-listed China stocks are pennies.
The losses among China stocks are mind-boggling and far exceed the losses sustained on their homeland. Cosco Corp and Yangzijang Shipbuilding for instance, two components of the Straits Times Index, have lost 70 and 80 per cent in 2008 versus about 55 per cent for the mainland China indices.
(We've assumed that the currencies have remained unchanged).
A ballpark estimate is that the SGX-listed China sector is down at least 80 per cent from their highs, a massive underperformance that only lends weight to the criticism that China companies who choose to list here are mainly - not entirely - of sub-standard investment grade.
A ballpark estimate is that the SGX-listed China sector is down at least 80 per cent from their highs, a massive underperformance that only lends weight to the criticism that China companies who choose to list here are mainly - not entirely - of sub-standard investment grade.
======================
THis is a warning to singapore. Seen on a broader scale , when it can only attract 'FT' of substandard levels as genuine FT seek to avoid NS . The entire island will collaspe together with the substandard stocks in SGX.
================================================
Weekly Market Report
'The truth, the damned truth... and statistics'
Email this article
Print article
Feedback
SINGAPORE - Mark Twain once wrote 'there are three kinds of lies - lies, damned lies and statistics'. (It was actually former British prime minister Benjamin Disraeli who coined the phrase but it was Twain who popularised the notion that statistics can be used to tell lies).
True, we've all seen how numbers can be used to sway an argument (or get clients to buy) even when those arguments may have been flawed to begin with. Unfortunately for the Singapore stock market, the numbers don't lie.
There are 787 listed entities on the Singapore Exchange (SGX), excluding warrants. Of these, a staggering 658 or 84 per cent trade for less than $1 which puts them in the penny category.
It's a good thing that SGX does not have a rule similar to Nasdaq's, which is that a company whose shares trade below US$1 for 30 consecutive business days faces the threat of delisting.
(They are given 90 days grace to ensure compliance, though in times of extreme stress, such as 9/11, the rule can be temporarily suspended).
If SGX had a minimum-price continued listing rule, then more than 80 per cent of the Singapore market would vanish.
Think about this - despite all the attempts by SGX and the authorities to elevate the local market into the realm of the extraordinary, only 16 per cent of the local stock market can justifiably claim to be non- penny stocks.
Of course, you'd have to factor in that we're in the midst of a bear market, so perhaps some allowances should be made. However, the picture doesn't get much better the lower the penny barrier - if we accept 50 cents as separating penny stocks from non-penny stocks, the proportion which trades for less than 50 cents is still a high 72 per cent.
Finally, set the penny hurdle rate at the minimum allowable initial public offer (IPO) price of 20 cents and the percentage that trades for 20 cents or less is a shockingly high 47 per cent.
Even Mark Twain wouldn't be able to deny that whichever way you cut it, Singapore's is a penny stock market.
The next question an interested party might ask is: what of the much-vaunted China segment which was supposed to drive the market to greater heights?
Here too, the figures are disappointing. There are 50 China stocks that form the FTSE ST China index and only four sell for above $1, which means 92 per cent of SGX-listed China stocks are pennies.
The losses among China stocks are mind-boggling and far exceed the losses sustained on their homeland. Cosco Corp and Yangzijang Shipbuilding for instance, two components of the Straits Times Index, have lost 70 and 80 per cent in 2008 versus about 55 per cent for the mainland China indices.
(We've assumed that the currencies have remained unchanged).
A ballpark estimate is that the SGX-listed China sector is down at least 80 per cent from their highs, a massive underperformance that only lends weight to the criticism that China companies who choose to list here are mainly - not entirely - of sub-standard investment grade.
