Do the obvious:Cut minimum brokerage fee
A forum letter from Straits times right on the mark
“With computerisation, every transaction, whether 1,000 or one million shares, is just a transaction taking the same computer cycle to handle.
With the rapid decrease in computing costs over the years, transactional costs are drastically reduced.
When online trading was introduced, brokers really had no more excuses for charging higher fees for low-valued trades.
To compete in the global market, SGX brokers have to align their fee structure or risk losing clients.
The SGX, too, should improve its cost-effectiveness and lower the fees charged to the brokers, in tandem with today’s cheaper computing costs.
The same computer system is used in stock trading in markets like India, Malaysia and Thailand, wherein transactional values are much lower, partly by virtue of their lower currencies.
If these stock exchanges can survive, there is no reason why the SGX cannot be very profitable. This, however, requires the SGX to be truly committed to automation and productivity.
After spending hundreds of millions to purchase a system for “high-speed” trading, the low priority given to reducing retail investors’ costs makes the SGX’s call for more retail investors very hollow.”
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