SGX-listed companies and trusts score in corporate governance study
According to the 2023 Singapore Governance and Transparency Index (SGTI), Singapore-listed companies are seeing new records in governance and transparency. The study launched in 2017 is jointly conducted annually by CPA Australia, the National University of Singapore (NUS) Business School’s Centre for Governance and Sustainability and the Singapore Institute of Directors (SID).
This year’s scores have improved significantly in the general and the REIT and Business Trusts categories. The general category saw an improvement of 4.2 points y-o-y to 74.8 points in 2023, making this the largest quantum increase since 2020. At the same time, the REITs and Business Trusts category marked a four-point y-o-y growth to 89.3 points.
Within the general category, Singapore Telecommunications (Singtel) reclaimed the top position, which it held from 2015 to 2019, while DBS Group Holdings and Sats tied for second place. United Overseas Bank (UOB) remained in fourth place, while City Developments (CDL) and Singapore Exchange (SGX) were in joint fifth. These companies scored well in the general category’s five pillars: Board responsibility, rights of shareholders, engagement of stakeholders, accountability and audit, disclosure and transparency. This year, scores across all five pillars showed an overall increase for all the companies assessed.
Within the REIT and Business Trusts category, CapitaLand Ascott Trust (CLAS) retained the top place, while Far East Hospitality Trust (FEHT) and CapitaLand Ascendas Trust (CLAR) ranked second and third, respectively. CapitaLand India Trust (CLINT) made the top five rankings for the first time in fourth place, displacing CapitaLand Integrated Commercial Trust (CICT), which now ranks fifth.
This year’s index included assessments of 474 companies listed on the SGX in the general category and 43 trusts in the REIT and Business Trust categories. These companies and trusts released their annual reports by May 31.
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“The record performance in the 2023 SGTI scores is a testament to the unwavering commitment of SGX-listed companies and trusts to greater transparency and accountability. Strong corporate governance is paramount to driving sustainable growth in organisations and protecting stakeholders’ interests,” says Cheung Pui Yuen, Singapore divisional president of CPA Australia.
“This year’s improvement in the index score is most noteworthy. It reflects the ongoing efforts by companies to promote good corporate governance practices. More importantly, it highlights that the foundation for governance has been built, and companies are poised to emphasise sustainability in the future. Indeed, sustainable business practices will be crucial for long-term value creation and stakeholder trust,” says Professor Lawrence Loh, director of the Centre for Governance and Sustainability at NUS’s Business School.
“Good governance and transparency are the bedrock of Singapore’s success. They catalyse investor confidence, attract capital inflows, and enable sustainable growth. The improved SGTI scores are signs of a more resilient ecosystem as we collectively strive to move the needle to greater accountability and sustainability reporting,” says SID chair Wong Su-Yen. — Felicia Tan
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Iswaran’s pay cut to $8,500 a month amid CPIB probe: PM Lee
Transport Minister S Iswaran has been interdicted from duty with a reduced pay of $8,500 a month until further notice, says Prime Minister Lee Hsien Loong in an address to Parliament on Aug 2. He adds that the government had used the current civil service practice and similarly dealt with the case in how the civil service would deal with a senior officer.
In his speech, Lee urged members of the house and the public to “refrain from conjecture” while the Corrupt Practices Investigation Bureau (CPIB) investigations are ongoing. Once done, the CPIB will submit its findings to the Attorney General’s chambers. “The case will be taken to its logical conclusion. That’s always been our way.”
Lee said that he was alerted to the case by CPIB on May 29. The director of CPIB then briefed him on July 5. CPIB would need to interview Iswaran and seek Lee’s concurrence to open a formal investigation. It was given on July 6.
In a separate statement, Education Minister Chan Chun Sing said that the CPIB did not state that Iswaran had been arrested on July 12 to gather more facts on the case.
Iswaran was brought in by the CPIB on July 11 and released on bail. On the same day, the CPIB released a statement that Iswaran was assisting in investigations related to a case the bureau uncovered. He was also instructed by the Prime Minister to take a leave of absence. — Felicia Tan
M&A deals surged 28% q-o-q to US$602 bil in 2Q2023, but down in Apac ex-China
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Global mergers and acquisitions (M&A) deals surged 28% q-o-q to reach US$602 billion ($809 billion) in 2Q2023, as reported by London-headquartered data and analytics company GlobalData. Of these, 124 were “mega-deals”, hitting at least US$1 billion. This was up 46% q-o-q from 85 “mega-deals” in the previous quarter.
Regarding deal volume, however, the 8,001 M&A deals recorded in 2Q2023 mark a 3.3% q-o-q fall. M&A deal activity declined y-o-y and q-o-q in Asia-Pacific (Apac), excluding China. “This indicates that the investors are more cautious towards this region,” according to the Mergers and Acquisitions Deals by Top Themes and Industries in Q2 2023 — Thematic Intelligence report, released July 27.
North America continued to lead M&A deal activity in 2Q2023, notes GlobalData thematic intelligence analyst Priya Toppo. It accounted for 3,185 deals worth US$291 billion, making it the most active region. Europe was the second-largest region by deal value.
The key sectors considered for M&A activity in 2Q2023 were basic material, energy, automotive, consumer, healthcare and technology, media and telecommunications. The basic material sector accounted for the highest deal value in 2Q2023, with 1,611 deals worth US$212 billion recorded during the quarter.
Some key acquirers in the basic material sectors were Bunge, Glencore, Carrier Global, Chow Tai Fook and KKR. In June, American agribusiness Bunge merged with grain handler and agribusiness Viterra to disrupt the supply chain in Europe, forming a US$34 billion agricultural giant.
Globally, environmental, social and governance (ESG) was the most prominent theme driving M&A activity in 2Q2023, with 104 deals worth US$145 billion. After four consecutive quarters of decline, this growth signals a resurgence in ESG deal-making activities, notes GlobalData.
Toppo says: “This thematic emphasis reflects a growing awareness among corporations about the impact of their actions on society and the environment, and it highlights investors’ increasing focus on companies that prioritise ESG principles.”
As businesses seek to align themselves with societal and environmental goals, GlobalData expects the ESG theme to continue driving M&A strategies in the foreseeable future. Despite the recovery in global M&A activity in 2Q2023, Toppo says the outlook for 2H2023 remains “relatively sluggish”, with likely further increases in interest rates and the prospects of mild recessions in several key markets. “The M&A market will likely rebound as we head into 2024, as acquisitions remain a key element of corporate strategy.” — Jovi Ho
