SGX lot changes fail to shift bank trading dominance

SGX reduces minimum share lots

Singapore Exchange (SGX) adjusted its minimum trading lot size on 5 October (this year, 2026). This change enabled investors to purchase shares in lots of 10, rather than the previous 100, for the bourse's most expensive counters. The initiative specifically targeted increasing retail investor participation in high-value stocks, including those of DBS, OCBC, and UOB.

SGX noted that many small investors initially responded positively to the new, more accessible entry point, aiming to make these prominent listings more attainable.

Local banks command September turnover

Despite the SGX's efforts to diversify participation, the three major local banks, DBS, OCBC, and UOB, continued to account for a significant portion of market activity. In September (this year, 2026), these institutions collectively represented a third of the total market turnover on the SGX. This share marks an increase from 26 per cent recorded in September 2025. Overall, Straits Times Index (STI) constituents represent a substantial 80 per cent of all trading value on the bourse.

Limited impact on market structure

Despite the initial uptake from retail investors, the introduction of smaller lots has not significantly altered the broader market structure. The 11 stocks eligible for the 10-share lots, which include the major banks, collectively accounted for approximately 35 per cent of SGX trading in the first half of 2026. This indicates the substantial influence of these larger counters.

Market observations suggest that while retail interest increased, significant trading volumes in bank stocks continued to be driven by larger institutional players, limiting the overall impact of the lot size change on market concentration.

Concentration limits market diversity

The sustained dominance of a few large-cap bank stocks on the SGX indicates that liquidity remains highly concentrated. For investors seeking exposure to a broader range of companies, particularly smaller and mid-sized enterprises, this concentration means that their impact on overall market turnover remains limited.

Future SGX initiatives could focus on other mechanisms to enhance visibility and trading volumes for these smaller counters, potentially attracting more diverse capital flows beyond the established blue-chip names.