PUBLIC LISTED COMPANIES (Reporting of quarterly results)

Column: 25

PUBLIC LISTED COMPANIES:

(Reporting of quarterly results): 7.

Mr Ng Ser Miang asked the Deputy Prime Minister and Minister for Finance what has been the experience with the requirement for public listed companies to report quarterly results and whether his Ministry will consider reviewing this requirement.

Mr Lee Hsien Loong: Mr Speaker, Sir, in today's globalised economy with large and growing cross-border capital movements, it is important that companies provide investors with timely and adequate financial information. Developed economies such as the European Union, Canada, US and Japan, as well as developing Asian economies such as China, India, Malaysia and Thailand, have all implemented quarterly reporting for their listed companies. As a major capital market, Singapore should keep up with international best practices which would enhance Singapore's transparency and standing as a world-class business and financial centre.

Column: 26

However, in the implementation of quarterly reporting, the Government is cognisant of our local conditions and concerns. In August 2002, the Council on Corporate Disclosure and Governance (CCDG) reviewed the original recommendation of mandatory quarterly reporting for all listed companies in Singapore made by the Disclosure and Accounting Standards Committee. The CCDG recommended a one-year deferment for listed companies with market capitalisation of $20 million or less. In April 2003, the Government decided to raise this market capitalisation threshold from $20 million to $75 million and to further defer the implementation date of quarterly reporting for these smaller companies, in view of the difficult business conditions.

Quarterly reporting has generally been beneficial for investors as they are able to track the performance of listed companies more easily. Investors receive, on a more timely basis, information on the financial performance of the companies they invest in. Listed companies have generally been able to comply with these requirements, except in isolated incidents where the company is reporting quarterly results for the first time, or the company is under judicial management.

In those cases, the companies have requested an extension of time beyond the 60-day period, and most of these requests were accommodated accordingly.

As I told this House last April, my Ministry will be reviewing the quarterly reporting requirement for smaller listed companies in mid-2005.

Mr Ng Ser Miang (Nominated Member): Sir, while there is benefit to quarterly reporting, I think it also represents additional cost. This is especially a burden to smaller companies. So, would the Minister consider raising the threshold of $75 million to a higher amount?

Column: 27

Mr Lee Hsien Loong: Mr Speaker, Sir, the Member's point is valid, but I think the $75 million threshold is quite a reasonable one. Because out of the total of 521 listed companies on the SGX, 193 are required to report quarterly and 328 are not required to report quarterly. So, the majority of companies - the small companies - will be less than $75 million. If we have more than $75 million market capitalisation, we are not so small.