Fund managers oppose dual-class shares plan in Singapore

  • Business
  • Friday, 14 Apr 2017

BlackRock is rebranding or adjusting investment strategies on about 11 percent of its $275 billion active stock fund business, putting a greater emphasis on technology-driven investing approaches in the largest set of sweeping changes for the business since transformational mergers that allowed it to grow to manage more than $5 trillion in assets.

SINGAPORE: International investors including BlackRock Inc and the Ontario Teachers Pension Plan have voiced their concerns about moves to allow dual-class share listings in Singapore, saying they risk damaging the city’s stock market and harming the region.

Dual-class shares would almost certainly prove to be counter-productive for Singapore and “likely trigger a race to the bottom regionally,” the Asian Corporate Governance Association, an industry group whose members also include listed companies, as well as insurance and accounting firms, said in a response to Singapore Exchange Ltd’s consultation on the plan.

The fight for global capital has pushed exchanges to seek new ways to attract initial share sales. Hong Kong Exchanges and Clearing Ltd in January said it would look again at dual-class shares more than a year after its regulator turned down the idea.

Such shares comprise a class of stock, often distributed to founding shareholders, that carries more voting rights than the ordinary shares sold to the public.

Companies including Snap Inc have drawn criticism for using the structure because of corporate governance concerns.

“Should SGX proceed with dual-class shares, we believe that any benefits will likely prove short-lived and largely enjoyed by a small group of issuers and intermediaries,” the group, two-thirds of whose members are institutional investors that manage more than US$25 trillion, said in a letter dated April 11. – Bloomberg




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