When the Music Stops – No More Minimum Commissions on Standard Chartered
Well, an era of no minimum commissions has ended for retail investors in Singapore – Standard Chartered has sent out love letters to clients like me, informing us of the change in commissions from August 2016 onwards:
Right about now, unless you’re a priority banking client with SCB, panic should set in for you, dear reader. First off, stop panicking. Life still goes on. Despite the $10 or so charge, it is still cheaper to use SCB to buy for overseas shares, as SCB has promised to not charge us maintenance fees, dividend handling fees, corporate action fees, etc. . However, for shares on the SGX, it’s up to your own decision to use a retail brokerage, or stick with SCB. Some of you might even want to consider switching to a monthly investment plan to reduce costs as well. Do your costing calculations, before deciding to trim or hold your positions in SCB.
With that said, my grouse for complaint is that for $10, their platform and UI must at least be on par with retail brokerages, as the charges will now be similar. However, for $10 for the current state of SCB’s platform and UI, it seems woefully subpar. I don’t mind paying $2 to $5 for a trade, as I feel this should be the fair price for SCB’s current system, but at $10, it’s a real show stopper.
Additionally, I doubt there are enough people having shares in SCB to move the market, otherwise SGX would have a big problem. Therefore, I foresee that the majority of penny stocks and mid-caps will have their trading volumes cut down by a lot come August 1st. Which means that, if the SGX were to be a patient on life support, come August 1st, it would be a walking zombie.
Of course, there might be new hope that a newcomer that will change the landscape, or at least revert to the days of no minimum commissions; perhaps some time later, in a galaxy not so far away…