Removal of quarterly reporting?

Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
Wonder if this will affect the stock turnover(trading by retail investors) of SGX stocks, but personally, dreamybear wld prefer quarterly reporting so as to track the companies more closely. Some companies hold result briefings/misc mtgs to brokers/institutional investors and some of these are not available to retail investors. Sad

Even if there are more disclosures, unless one is a professional full time investor, how many retail investors have the time and energy to check the sgx companies' announcements page every day for all the companies one is vested in ? Maybe all companies can be asked to have an email alert feature on announcements.  Big Grin  

At the same time, maybe the IR portion of companies shd also be beefed up, e.g. have a FAQ, online submission of questions that facilitate auto-checking of proof of shareholding(instead of having to email screen capture of CDP statement or other types of verification sent thru' email, which I think is a security risk given there are more data breaches/hacking incidents nowadays), etc. 

Singapore Exchange scraps compulsory quarterly reporting for companies
Updated: 09 Jan 2020 06:25PM

SINGAPORE: Companies listed on Singapore Exchange will no longer be required to file quarterly reports, in line with practices in global markets including Hong Kong, the United Kingdom and the European Union, the bourse's regulatory unit said.

"Singapore Exchange Regulation (SGX RegCo) will apply quarterly reporting requirements only for companies associated with higher risks while strengthening continuous disclosure requirements on all listed companies," SGX RegCo said in a statement on Thursday (Jan 9)......

SGX RegCo said it is also strengthening continuous disclosures requirements in areas of high investor interest such as interested person transactions, significant financial assistance, significant transactions and secondary fund-raising......

SGX eases reporting rules for firms, but adds safeguards
Published 10 Jan 2020
"....This did not mean that investors would be kept in the dark as SGX said all companies must disclose significant information and developments immediately...."
The number of listed companies has been shrinking globally for the past decades. As private wealth continue to accumulate and interest rates continue to stay low, it looks like this general trend is not likely to reverse any time soon.

Despite the fall in number of listed companies, it is apparent that accounting scandals and other serious regulatory infringements continue to occur among listed companies. In such unfortunate events, regulators/exchanges are often put under the public spotlight and criticised for not imposing more rules, or enforcing old ones.

Yet, regulators/exchanges are also often cited as part of the cause when issues concerning low trading volumes and liquidity are brought up.

Should regulators tighten rules or relax them?

As participation in public capital markets decrease, it makes economic sense to devote fewer (financial) resources to managing/regulating it; just as it does not make economic sense to increase capital in a business that is expected to experience decreasing returns. If the low interest rate environment persist, I expect listed companies to make further demands on further deregulation.

SGX has so far demonstrated good faith in responding to the concerns of retails investors. And I don't think the markets are any more dangerous now than they are 10 years ago. But rule breakers are creative, and will eventually find workarounds. It is not realistic to expect SGX to always be there to catch you before you fall. Thus, any participant in the public capital market has to be acutely aware of its workings, or risk being road kill. It is the same for road users, as it is for workplace politics.

The operating performance of a listed company will always be opaque to minority investors. And the removal of quarterly reporting will make it more so. While this may discourage some participants from entering the market, it also means more opportunities for those remaining. To safeguard their investments, minority investors may respond by furthering their due diligence effort, and/or increase the diversification of their portfolio.

As for the future of Singapore's public capital market, there will likely be fewer listings coming from neighbouring countries as their wealth accumulate, and their own capital markets become increasingly developed. Probably more effort will be placed in developing the corporate bond market to serve big-ticket financing needs in the region.
"Singapore's frontline market regulator has released a list comprising 109 "riskier issuers" which must continue to make quarterly reporting (QR) of their financial results."

for those interested in the list of 109 firms it can be found here:
I think that local companies which are not paying annual dividend atleast 33% of annual profit or not paying any dividend to shareholders should be made to give quarterly reporting .
(19-02-2020, 04:44 PM)soros Wrote: I think that local companies which are not paying annual dividend atleast 33% of annual profit or not paying any dividend to shareholders should be made to give quarterly  reporting .

I support  Smile
This is bad for all SGX shares investor, especially valuebuddies who I believe like to read all the quarterly financial reports in details. We look forward to each reporting period enthusiastically and wish all companies can provide reports more often. Now instead of 3 months we have to wait a painful 6 months.
Even a big brother blue chip like DBS has announced they will scrap the 1q/3q reports (but still provide scaled down updates). The other companies will surely follow as well.
Some china based property developers listed on the HKEX give a voluntary monthly announcement of their sales turnover for the previous month, with a warning the figures are unaudited. This information is a good sign for shareholders and helpful to prospective investors.
Currently, Singapore-listed companies with a market value of more than S$75 million (US$55.5 million) are required to issue quarterly results, which would account for about 70 per cent of the 750-odd companies listed on the exchange.

Companies will now only need to file semi-annual reports.

SGX RegCo said it is also strengthening continuous disclosures requirements in areas of high investor interest such as interested person transactions, significant financial assistance, significant transactions and secondary fund-raising.

Tan said SGX RegCo will soon seek a public consultation on its proposals for companies required to have a second auditor in certain cases and a Singapore-based auditor for all listed companies.

It seems the decision on requiring 119 firms to continue quarterly reporting has already been implemented .

Auditors are usually approved at the shareholders meeting ( AGM ) . Who decides which second auditor is appointed ? .
Fast forward few years after the cease of mandatory quarterly report for companies who qualify, I wonder how OPMIs think about this change?

Personally, I prefer the current reporting frequency (semi annual) because it has freed up more time in the monitoring of results (which are backward looking). Many critics of non-mandatory quarterly reporting believes that more monitoring --> better investment outcome. But is this cause-effect relationship really true? Freed-up time could then be re-invested to look at more forward looking indicators of business performance OR increase my circle of competence in new industries.

Finally, semi annual reporting helps to introduce more "uncertainty" compared to previous, and so more inefficiencies. Of course, more market inefficiencies doesn't mean one can take advantage of it. So the onus is up to one to be able to take advantage of the "more inefficiencies".

P.S. I would just hope the Mgt of Food Empire call a spade a spade, ie. removing quarterly reporting is a cost savings. Based on their track record, I am pretty sure that they wouldn't be enticed into short term thinking purely because of quarterly reporting.

With effect from 1Q2024, Food Empire has decided to shift from reporting quarterly financial results to providing regular business updates. This change in approach allows us to move away from the short-term focus of quarterly earnings and instead prioritise a more sustainable, forwardthinking and long-term approach to our business strategy and outlook.

Forum Jump:

Users browsing this thread: 1 Guest(s)