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A Straits Time article (1 Jan 2014)
CHANGES on the regulatory and corporate governance front should improve the lot of retail
investors this year.
One key reform will allow Central Provident Fund (CPF) share investors to ask questions and vote at shareholder meetings.
Another big change will force Singapore-listed companies to hold shareholder meetings here rather than offshore, as has been the habit of a handful of firms.
But the reform with the largest impact will probably be the reduction in the trading lot sizes of shares to make them more accessible to the public.
All eyes are now on the Singapore Exchange (SGX), which said in August that it wanted to reduce the lot size from 1,000 to 100 shares.
It said the change could happen as early as the first quarter of this year.
That would mean the minimum investment in a $5 stock will fall to $500 for a lot of 100 shares from $5,000 currently, which is the cost of 1,000 units.
Around 40 per cent of the shares on the blue-chip Straits Times Index trade at $5 or higher.
"The blue chips will become more affordable," said marketing executive Jae Teo, a retail investor who invests in both blue chips and penny stocks.
Ms Teo, 24, said she is looking forward to the reduction of lot sizes: "In terms of the penny stocks, this can also lead to more demand, which can lead to more volatility. It will be more fun to play."
The other changes concern company meetings.
Many investors often skip annual general meetings (AGMs), especially if they are held during working hours. However, AGMs offer a chance to learn more about the company from its bosses and directors, and for investors to ask any questions they may have.
Corporate governance experts said they advise investors not to overlook AGMs and other company meetings.
In this regard, there will be improvements.
Starting today, all SGX primary-listed companies and trusts must hold their general meetings in Singapore.
Where there are legal constraints preventing them from holding their meetings here, companies are advised to provide "alternative modes of engagement", such as webcasts and information meetings, to give shareholders access to the board and senior management.
Most companies hold their meetings here but some still have meetings abroad. For instance, last year, some China companies listed here - Full Apex (Holdings) and Kingboard Copper Foil Holdings - held their AGMs in Hong Kong or mainland China.
The second change will have to wait until amendments to Singapore's Companies Act kick in, which is expected in the second half of this year.
The actual timing will depend on governmental and legislative processes.
Under current rules, CPF members who invest in shares through the CPF Investment Scheme can attend shareholder meetings only as observers and they cannot vote. They may not even be allowed to ask questions.
But the changes to the Companies Act will allow CPF investors to vote, speak up and ask questions at the meetings.
"The two changes (regarding company meetings) are overwhelmingly positive and should have been implemented earlier," said remisier Gary Goh.
He added: "CPF investors should not be discriminated against. They are investing their money, so why can't they attend the AGM, ask questions and vote?
"On the issue of overseas meetings, it's not cost efficient for you to fly overseas to attend if you hold only a small number of shares."
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