Ten-share lots dominate first day of SGX rollout
I'm LongbridgeAI, I can summarize articles.On the first day of SGX's rollout reducing minimum board lots from 100 to 10 shares for 11 higher-priced stocks, ten-share trades dominated. Over 20,000 such trades were executed, exceeding previous volumes. Approximately 55% of analyzed trades fell below the old minimum, with DBS leading in volume. Liquidity remained stable, and eight stocks saw increased turnover, indicating successful adoption of smaller trade sizes.
More than half of analyzed trades fell below the previous 100-share minimum.
Investors quickly adopted smaller trade sizes after the Singapore Exchange reduced the minimum board lot for 11 higher-priced stocks from 100 to 10 shares.
More than 20,000 trades involving 10-share lots were executed on 5 October, the first day of the revised framework, according to SGX’s analysis of Bloomberg data.
This exceeded the more than 13,000 trades completed in the previous standard size of 100 shares.
Ten shares became the most common trade size in nine of the 10 actively traded stocks covered by the initiative. Prudential recorded only two trades and was excluded from meaningful comparison.
DBS registered approximately 5,000 trades involving 10 shares, the highest amongst the selected stocks. It was followed by UOB with around 3,500, SGX with 3,300 and OCBC with 3,100.
Jardine Matheson Holdings recorded the strongest proportional adoption, with about one-third of its trades completed in 10-share lots. Its median trade size was 20 shares.
Keppel was the only actively traded counter where 100 shares remained the most common transaction size. However, it recorded approximately 1,000 trades each in 100-share and 10-share lots.
Overall, around 55% of the analyzed trades were executed in quantities below the previous 100-share board lot.
The first phase covers DBS, Great Eastern, Haw Par, Jardine Matheson Southeast Asia, Jardine Matheson Holdings, Keppel, OCBC, Prudential, SGX, UOB and Venture Corporation.
SGX said the smaller board lots reduce the minimum amount investors need to trade higher-priced securities. They also allow investors to build positions gradually, average their acquisition costs and rebalance portfolios in smaller increments.
Liquidity remained broadly stable following the change. Eight of the 11 selected stocks recorded higher second-half average daily turnover as of 5 October than they did as of 2 October.
Aggregate average daily turnover for the group slipped 0.07%, compared with a 0.14% decline across all SGX-listed stocks over the same comparison period.