Has SGX's 10-Share Lot Policy Diversified Market Activity?

SGX Policy Aims to Broaden Retail Engagement

On October 5, 2026, the Singapore Exchange (SGX) implemented a policy change allowing investors to purchase shares in lots of 10, a reduction from the previous standard of 100 shares. This adjustment was specifically applied to the exchange's higher-priced counters, including major financial institutions such as DBS, OCBC, and UOB.

The stated objective behind this initiative was to enhance retail participation in the market by making it more affordable for smaller investors to acquire stakes in these prominent companies.

Prior to this change, these 11 high-value stocks collectively represented approximately 35 per cent of all trading activity on the SGX during the first half of 2026, indicating their substantial influence on overall market dynamics.

The exchange anticipated that lowering the entry barrier would encourage a wider base of individual investors to engage with these significant market players.

Market Concentration Persists Post-Change

Despite the recent policy shift, data from September 2026 reveals a continued high level of market concentration on the Singapore Exchange. The three dominant local banks—DBS, OCBC, and UOB—collectively accounted for a third of the total turnover on the SGX during that month.

This figure marks an increase from their 26 per cent share recorded in September 2025, suggesting a deepening concentration rather than a diversification of trading activity. Furthermore, stocks listed on the Straits Times Index (STI) represented a substantial 80 per cent of all trading value on the exchange in September 2026.

This indicates that while the lot size reduction aimed to democratise access, the bulk of capital flow and investor interest remains firmly anchored in a limited number of large-cap entities, particularly within the financial sector.

Limited Impact on Broader Market Dynamics

The immediate market reaction following the implementation of the 10-share lot policy suggests that the change had a minimal effect on broader trading patterns. Commentary in The Business Times observed that within three days of the policy's introduction, significant institutional selling pressure affected the shares of the major banks.

This indicates that while many small investors reportedly took up the offer to buy smaller lots, the revised lot sizes did not prevent large-scale capital movements by institutional players. Moreover, the policy appears to have had little benefit for the small and mid-capitalisation counters that might genuinely require such measures to boost liquidity and investor interest.

These smaller companies, which could benefit most from increased retail participation, have not seen a material shift in their trading volumes or investor engagement, reinforcing the market's existing structure.

Implications for SGX Market Diversification

The sustained concentration of trading activity in a few large-cap bank stocks, even after the SGX's policy intervention, highlights the challenge of diversifying market participation.

For policymakers and exchange operators, this outcome suggests that reducing lot sizes alone may be insufficient to fundamentally alter established trading behaviours or attract significant new capital into smaller segments of the market.

Future efforts to broaden retail engagement and distribute liquidity more evenly across the exchange's listings may need to consider additional structural or incentive-based mechanisms.

Decision-makers will need to analyse whether the current policy achieves its long-term goal of fostering a more inclusive and dynamic market, or if further measures are required to support the growth and visibility of small and mid-cap companies on the SGX beyond the initial uptake observed in October 2026.