In countries like Malaysia, Thailand and Australia, locally domiciled funds that are mostly linked to domestic pension funds account for a constant flow of liquidity into the local markets.
The recent pullback in market volumes here – from 38.6 billion shares in September to 29.3 billion shares in November – has raised concerns that the EQDP funds alone may not be enough to sustain the uptrend over a longer term. SGX’s current daily liquidity of around S$1.5 billion still falls far short of several of our neighbours.
OTHER INITIATIVES TO CONSIDER
More can be done to attract liquidity, such as custodial services.
