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Singapore Exchange Limited (SGX) is pleased to announce that its Research Incentive Scheme, established in December 2003 to promote research coverage on SGX listed companies, has been extended for a further two years.
Commencing May 2008, the scheme allows new applications each quarter, compared to only at the start of each two-year phase previously. This feature enables both newly-listed and existing companies to join the scheme at shorter interval.
In addition, SGX will double its subsidy for companies who join the scheme, from S$1,000 to S$2,000 per listed company per annum. With this subsidy, each participating listed company will pay an annual amount of S$13,000, for two research firms to cover it under the scheme. The participating research firms will each receive an amount of S$7,500 for every company covered.
The amount payable to the research firms takes into account the rise in the cost of providing quality research, which reflects the significant value placed on independent equity research in today’s financial markets. Each research firm is required to produce at least three reports every year for each company under the scheme. In the first year of coverage an initiation report is mandatory within the first six months of allocation for new participating companies and existing companies that are starting with a new research firm. With this modification, SGX seeks to encourage participation from listed companies while ensuring commitment from the research firms.
Mr Lawrence Wong, Executive Vice President and Head of Listings at SGX said, “The Research Incentive Scheme is a key post-IPO service to help raise the profiles of our listed companies among investors. This is part of enhancing our comprehensive offering to listed companies, which contributed to SGX becoming a listing platform of choice in Asia for foreign companies.”
All companies listed on SGX Mainboard and Catalist are invited to participate in the scheme, where two research firms will be assigned to provide research coverage on each participating company for a period of two years. Currently, the scheme has registered participation from 93 listed companies and seven research firms.
Regular research reports on the participating companies are published on the SGX website at research.sgx.com and available free of charge to the public. The average monthly downloads on the website have increased from 37,000 in 2004 to 50,000 in 2008.
Similar to previous phases, SGX undertakes the administration and management of the scheme.
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