Bloomberg/Singapore


When Loh Boon Chye left the board of Singapore Exchange in 2012, equity trading volume on the city’s bourse had been steadily dwindling for years.
On Tuesday, the veteran Singaporean banker returns to the exchange’s recently-renovated downtown offices as its new chief executive. He will soon have to confront an issue that’s more acute than ever – in the intervening period, the average daily value of equities traded kept dropping. Turnover on Singapore’s bourse in 2015 has been 95% lower than in Hong Kong.
Loh will need to summon management skills honed over more than two decades in international banking to revive the market and appease Singapore’s brokers, who say SGX’s top executives neglected domestic equity trading to focus on developing new derivative contracts.
“They’ve been pushing for the derivatives business because that’s where the growth is,” said Jimmy Ho, president of the Society of Remisiers, which represents Singapore’s commission- based stockbrokers. “They’ve forgotten about the stock market.”
Share trading in the city has stagnated largely due to the dearth of new offerings. Only three companies have listed in Singapore so far this year, at a time when Shanghai and Hong Kong have seen a flood of initial public offerings.
Investor sentiment has also yet to recover from an unexplained $6.9bn plunge in the value of three commodity companies over three trading days in October 2013, which sapped confidence in the market. Last month, SGX was reprimanded by the Monetary Authority of Singapore over two trading outages in 2014 that forced then-CEO Magnus Bocker to make a public apology.
Those who know Loh from his stints at Deutsche Bank and then Bank of America Corp say he is well qualified to deal with the challenges he will face in his new job, even if the task of reviving local share trading is daunting.
“At SGX, he’ll have a lot of different constituents he’ll have to deal with, who have different needs and aspirations,” said Philip Lee, vice chairman of Southeast Asia at Deutsche Bank. “The ability to have empathy and connect with others will stand him in good stead. He’s always very calm, he’s never flustered even in the most demanding situation so he’s therefore able to make rational decisions.”
Loh’s success in building up Deutsche Bank’s fixed income business when he was head of Asian global markets between 2002 and 2010 illustrated some of the skills he will bring to reviving the SGX business, said Mark Leahy, who worked for Loh as head of Asia debt syndication during much of that period.
“This was his first ‘long ball’ or taking a long term perspective on the region’s opportunities,” Leahy said. “Having this perspective is one thing but driving the essential internal consensus and support for the strategy during hard times is the real talent.”