Thursday, March 19, 2015

Extended Settlement Contracts designated as dormant


‘ In view of the low levels of trading interest in the SGX Extended Settlement (ES) Contracts, SGX has decided to designate these contracts as dormant, with effect from 1 April 2015.’
 

This is a product that has its lifespan prematurely shortened for lack of interest. Trading on this product has petered to negligible level in its few years of existence since its introduction into the market in Jan 2009.
 

A peep into the stock market also revealed that hundreds of stocks listed in the SGX were also thinly traded or not traded for weeks or months. Interest in such inactive stocks is so low that it would not be a surprise if they will be delisted voluntarily by the respective companies in due course.
 

It would not be funny if such inactive stocks will also be designated as dormant stocks one day. A quick count on Friday 20 Mar morning, 11am, showed that at least 350 stocks were not traded at all, inclusive of 28 suspended counters. This is nearly 50 percent of the 805 counters listed. If this is going to be the case and going to be a norm, what does it say of the market and these stocks?
 

What do you think? Would they join the company of Extended Settlement Contracts as dormant stocks?

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