Singapore stocks: Once bitten, twice shy

[weijian]

Mr Tan Boon Gin just gave a nudge to companies to start to issue "forward guidance". 

In general, a listed co is an outlier if they didn't issue pretty specific forward guidance in the US markets. And often, a mid single digit change in expected growth rates in the forward guidance for the next quarter can actually result in a double digit change in its stock price. And for locally listed companies, they are outliers if they do issue specific forward guidance. And to that extreme, the standard boilerplate commentary for local companies would have writings like "expect to be profitable".

My guess is that local companies will start to move towards the direction of "more forward guidance" and it will achieve a momentum of its own. Whether the aggregate effect make the local market more efficient or not, it will be up for observation.

Forward guidance: Why it matters and how to get it right

In our many engagements with investors, forward-looking statements – commonly referred to as earnings or forward guidance – rank high on investors’ wish lists. Research analysts and institutional investors consistently emphasise the importance of anticipated earnings and the strategy the business will employ to achieve those results.

Yet, few companies provide such statements. Why? Misperceptions. Let us clarify three biggest myths....

SGX RegCo will adopt a sensible approach. Forward-looking disclosures that issuers announce in good faith, accompanied by appropriate disclosures to enable investors to appreciate both the basis for the projections as well as the inherent uncertainties involved, should in the ordinary course of events not attract regulatory queries.

SGX RegCo continues to support disclosures that promote transparency and informed decision-making. Forward guidance should not be viewed as compliance, but a competitive edge. It signals confidence and builds credibility, which can underpin value.

https://www.businesstimes.com.sg/compani...t-it-right

[Corgitator]

It's funny because Buffett, Dimon and Fink (heavyweight representatives of active investment firms, banks and passive investment funds, arguably the core players in capital markets) have all voiced their disdain for earnings guidance.

I thought the move away from quarterly reporting was a step in the right direction to encourage more long-term thinking by investors, to free up more time for management to focus on actually running the business and to reduce short-term speculation around earnings. Seems like this new effort, to some degree, goes against the spirit. Then again, the minimum trading price rule also did a u-turn, so who knows.

I think Ford's quote "If I had asked people what they wanted, they would have said faster horses." is applicable here, at times it's better not to design policies around wish lists of the majority.

[CY09]

For some industries like REITs and Semicon, without earnings guidance, it is very hard to accurately forecast the earnings of the company.

Take for example Frencken, investors have to piece the construction of the new Singapore plant and its new earnings book to approximate the earnings potential. As investors, we are not able to accurately forecast, but the mgmt knows and can give good guidance. With this a more accurate share pricing can be valued.

Same for PRIME US REIT. In fact, despite news of securing new leases, for the next quarter or two, PRIME US REIT is going to experience a fall in revenue/net profit/cash available for distribution; MOST OF THESE INFORMATION IS NOT KNOWN BY THE PUBLIC. A lot of digging has to be done such as piecing their leases signed, knowledge of the USA real estate market where rent free is given at the start of the lease and one month free rent per year signed.

If the company gives guidance, its great because it reduces the information asymmetry. I, for one, prefer removing this so as to be able to value companies accurately. Too much brain juice has been spent by myself to piece and read up knowledge; as a lazy individual, if the company can give guidance, it's the best.

[weijian]

@Corgitator,
Unless one has the ability to invent a car, else faster horses is what one may have to offer especially if everyone are breeding stallions in their stable now. End of the day, I think it is preferable to throw many things and see what sticks. For those that don't work, I think it is ok to reverse course (eg. the lunch break) after admitting it was a mistake. As Terry Smith has said - Be the Man In the Arena.

I am also very happy that there is no quarterly reporting. Besides saving Mgt time, also saves me a lot of time!


@CY09,
I am actually afraid earnings guidance makes the market more efficient. But of course, if earnings guidance happens to companies that I already own and boosts their valuation, then I welcome it with both hands!

[weijian]

Mr Tan Boon Gin just gave a nudge to companies to start to issue "forward guidance". 

In general, a listed co is an outlier if they didn't issue pretty specific forward guidance in the US markets. And often, a mid single digit change in expected growth rates in the forward guidance for the next quarter can actually result in a double digit change in its stock price. And for locally listed companies, they are outliers if they do issue specific forward guidance. And to that extreme, the standard boilerplate commentary for local companies would have writings like "expect to be profitable".

My guess is that local companies will start to move towards the direction of "more forward guidance" and it will achieve a momentum of its own. Whether the aggregate effect make the local market more efficient or not, it will be up for observation.

Forward guidance: Why it matters and how to get it right

In our many engagements with investors, forward-looking statements – commonly referred to as earnings or forward guidance – rank high on investors’ wish lists. Research analysts and institutional investors consistently emphasise the importance of anticipated earnings and the strategy the business will employ to achieve those results.

Yet, few companies provide such statements. Why? Misperceptions. Let us clarify three biggest myths....

SGX RegCo will adopt a sensible approach. Forward-looking disclosures that issuers announce in good faith, accompanied by appropriate disclosures to enable investors to appreciate both the basis for the projections as well as the inherent uncertainties involved, should in the ordinary course of events not attract regulatory queries.

SGX RegCo continues to support disclosures that promote transparency and informed decision-making. Forward guidance should not be viewed as compliance, but a competitive edge. It signals confidence and builds credibility, which can underpin value.

https://www.businesstimes.com.sg/compani...t-it-right

MAS, SGX pave way for forward-looking disclosures, but investors urged to tread with caution

The Monetary Authority of Singapore (MAS) is seeking feedback on proposed amendments to the Securities and Futures Act, alongside draft regulations to facilitate dual listings on the Global Listing Board. The proposals include safe-harbour provisions, in line with US market practice, to provide greater certainty around the publication of forward-looking statements.

In this context, “safe harbour” is defined as a legal defence to civil liability, provided that forward-looking statements are clearly identified as such and accompanied by meaningful cautionary language, among other conditions.

Michael Kwan, director at Resource Law, described the move as a “watershed moment” for Singapore’s capital markets, shifting from a regime where “silence was golden” to one that encourages managed disclosure.

TSMP’s Yuen-Thio similarly highlighted the risks of overly optimistic or pessimistic guidance. “Investors who have relied on the announcements and sold, bought or held on to shares may cry foul,” she said.

She suggested that companies should ensure their guidance is well-founded and “couched in terms which are not too specific”, with qualitative guidance being probably less of a risk.

https://www.businesstimes.com.sg/compani...ad-caution

[weijian]

(3) Another 60% of the 5bil EQDP has been disbursed. The final 20% will be left to some time in 2026.

IIRC, there were hopeful calls for the EQDP to be an annual event but it was subtly rejected by the minister in Parliament. Therefore, it is a pleasant surprise to see a 1 time 30% boost (an additional 1.5bil to the existing 5bil kitty) to the EQDP on its 1 year anniversary.

Looking back at the past year, it is fair to say that the 5bil EQDP has done wonders. Yes, it couldn't have done it on its own but it was the flagship move.

So, if I track back this whole development - First in early 2025, Minister Gan Kim Yong said NO to using ahgong's money to answer SGX Chairman's plead to address the demand side. Then the 5bil EQDP came out. In early 2026, Minister Chee Hong Tat subtly diverted calls to expand the EQDP to even make it an annual event. Then the additional 30% boost came out.

MAS Announces Expansion of Equity Market Development Programme

Singapore, 12 February 2026… The Monetary Authority of Singapore (MAS) today announced that it will expand the Equity Market Development Programme (EQDP) from S$5 billion to S$6.5 billion. This follows the announcement by the Prime Minister and Minister for Finance at Budget 2026 today to top up the Financial Sector Development Fund to support the expansion of the EQDP.

2 The EQDP was introduced in February 2025 as part of the Equities Market Review Group’s recommendations to develop Singapore’s local fund management industry and increase investor participation in Singapore equities. MAS has allocated S$3.95 billion across nine appointed asset managers to date. The EQDP continues to attract strong interest and a robust pipeline of applications from asset managers.

3 The expansion of the EQDP will enable more high-quality asset managers with strategies that invest significantly in Singapore equities to be funded, and also catalyse more third-party investments into the equities market. This will further anchor deeper pools of capital for Singapore listed companies with strong fundamentals and support a well-functioning and vibrant Singapore equities market. The next batch of EQDP managers is expected to be appointed around mid-2026.

https://www.mas.gov.sg/news/media-releas...-programme

[swakoo]

IIRC, there were hopeful calls for the EQDP to be an annual event but it was subtly rejected by the minister in Parliament. Therefore, it is a pleasant surprise to see a 1 time 30% boost (an additional 1.5bil to the existing 5bil kitty) to the EQDP on its 1 year anniversary.
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So, if I track back this whole development - First in early 2025, Minister Gan Kim Yong said NO to using ahgong's money to answer SGX Chairman's plead to address the demand side. Then the 5bil EQDP came out. In early 2026, Minister Chee Hong Tat subtly diverted calls to expand the EQDP to even make it an annual event. Then the additional 30% boost came out.

If Ministers Gan & Chee had said YES, think this would be akin to a PUT on the STI. (Just like the Fed PUT on Wall St with never ending QEs.) Possibly eventually leading to an STI bubble. With vigilante sharks circling looking to prick the bubble. 

Think the Ministers realize a psychological boot strap may be needed to resolve the chicken and egg conundrum of healthy mkt <=> more listings. Hence the ad hoc EQDP and 1 time 30% boost which is more judicious. Expectations of future boosts could also create a virtuous cycle in itself.

Looking back at the past year, it is fair to say that the 5bil EQDP has done wonders. Yes, it couldn't have done it on its own but it was the flagship move.

Think u're right. Maybe the good fortune was also Liberation Day leading to flight to Sg safe haven. Wonderful timing. 

[weijian]

If Ministers Gan & Chee had said YES, think this would be akin to a PUT on the STI. (Just like the Fed PUT on Wall St with never ending QEs.) Possibly eventually leading to an STI bubble. With vigilante sharks circling looking to prick the bubble. 

Think the Ministers realize a psychological boot strap may be needed to resolve the chicken and egg conundrum of healthy mkt <=> more listings. Hence the ad hoc EQDP and 1 time 30% boost which is more judicious. Expectations of future boosts could also create a virtuous cycle in itself.

Hi swakoo,

Whether is it a verbal YES before action OR the actual 5bil EQDP action, there isn't a difference in terms of been a PUT on the STI, isn't it? The only difference is the timing. Credit to these guys who are masters of psychology - When someone ask for A and you appear to yield, you end up looking weak and yet can't claim full credit for A. But when you appear to ignore it but later come back with A (or something similar) and let's not forget that most of us have short attention spans, then the narrative will be you did not yield and can claim (almost) full credit.

As the joke goes - the worst thing been in a bubble when it burst, is been outside of it before it burst...I call it a joke but it is reflective of how things really work psychologically in the markets. You cannot imagine how much I wish for bubbles to form in the stuff I already own!  (But alas I m not a good dreamer to start with, and so generally just end up buy cheaper stuff. And dreams seldom appear in cheaper stuff)

[swakoo]

Whether is it a verbal YES before action OR the actual 5bil EQDP action, there isn't a difference in terms of been a PUT on the STI, isn't it? The only difference is the timing.

Hi weijian, my take is if YES, it means Ah Gong will have unlimited money at play to put in, again and again, not just 1 time. So something like a PUT. But think your take could be different.

As the joke goes - the worst thing been in a bubble when it burst, is been outside of it before it burst...I call it a joke but it is reflective of how things really work psychologically in the markets.

The way i mentally get around this is that i tell myself to let the people in the bubble enjoy... until it bursts. And acknowledge that i do not have fun staying outside the bubble. Just a mental pre-programming.

[weijian]

Review Group Completes Equities Market Review, Unveils SGX-Nasdaq Dual Listing Bridge, S$30 million “Value Unlock” Package, and Second Batch of EQDP Asset Managers

• The establishment of a dual listing bridge connecting the Singapore Exchange (SGX) and Nasdaq.
  
• The launch of a S$30 million “Value Unlock” Package to help listed companies unlock shareholder value and deepen engagement.
  
• Appointment of the second batch of asset managers under the S$5 billion Equity Market Development Programme  (EQDP), with a total of S$2.85 billion placed across six managers.
  
• Trading and market structure enhancements to strengthen market making, modernise post-trade custody, and reduce board lot size.
  

https://www.mas.gov.sg/news/media-releas...ket-review

Summary Infographic: https://www.mas.gov.sg/-/media/mas/news/...aphics.pdf

There is a total 30mil up for grabs to "beef up" your IR/disclosure capability. It make total sense to set up clear KPIs to claim the grants.

As for the 4 specific items mentioned for disclosure, item 1 would be the most value add. And I suppose that there will be many towkays who will make it as vague as possible when 2028 comes. What is not been revealed, makes it even more revealing!

SGX RegCo proposes requiring disclosures for dividend, remuneration and IR policies

The proposed new rules will require an issuer to:
1. Disclose in its annual report the key performance indicators used to determine remuneration of the board and key management, and how these indicators align with long-term shareholder value creation;
2. Maintain and describe a dividend policy in its annual report;
3. Maintain an investor engagement website; and
4. Maintain and publish, on its website, an investor relations (IR) policy; and describe investor engagement activities in its annual report.

Following the recommendations of the Equities Market Review Group, set up by the Monetary Authority of Singapore (MAS) to enhance Singapore’s equities market, MAS and SGX have joined forces to support issuers in their value creation efforts.

Through the Value Unlock programme, MAS and SGX support issuers in understanding their valuation drivers; and implementing and communicating strategies that create sustainable shareholder value. As part of the programme, issuers may also receive financial grants to build capabilities in corporate strategy, capital management and investor relations. In return, grant recipients are expected to step up their corporate practices and disclosures.

SGX has so far engaged with over 130 issuers on these grants, but there is much work still to be done when it comes to strengthening investor engagement practices. Among the largest issuers listed on the Mainboard and Catalist, for instance, around two-thirds either do not disclose that they have an investor relations policy or do not publish their policy. Similarly, two-thirds do not disclose the metrics that are adopted to measure how remuneration is linked to value creation.

To further align incentives for issuers, SGX RegCo is proposing an enhanced set of standards for issuers when it comes to engaging investors and unlocking value for shareholders.

https://regco.sgx.com/regco/public-consu...eation-and