Quarterly Reporting Must Stay

The Edge:

The Singapore central is virtually to brand life easier for listed companies -- the safer ones, at least.

The bourse’s regulatory arm plans to destination quarterly earnings reporting requirements that currently utilize to all companies alongside a marketplace seat capitalization of at to the lowest degree S$75 ane K m ($56 million), according to Tan Boon Gin, the primary executive officeholder of Singapore Exchange Regulation.

When the dominion alter takes termination on Feb. 7, exclusively riskier companies volition demand to written report earnings every 3 months, Tan said at a press briefing. SGX RegCo volition also tighten other disclosure rules as well as innovate a novel whistleblowing policy equally component division of efforts to protect investors, Tan added.

Other global exchanges conduct maintain moved away from mandating quarterly reporting for all their companies. The EU ended its requirement inward 2013, spell Hong Kong exclusively applies the dominion to companies on its small-cap exchange. The U.S. Securities as well as Exchange Commission is currently reviewing the issue.

”Internationally, there’s a shift away from quarterly reporting as well as this is to permit companies to focus on the long term,” said Tan. About 75% of the local marketplace seat currently reports on a quarterly basis, according to SGX RegCo.

Under Singapore’s novel policy, a listed companionship volition conduct maintain to written report each quarter inward circumstances including when it receives a qualified written report from its auditors, or when they limited trouble organisation virtually the companionship equally a going concern. The requirement tin also last imposed if SGX RegCo has regulatory concerns virtually a companionship regarding disclosure breaches, for instance.

Additional disclosure requirements volition last introduced for rights issues
    Acquisitions that cut down internet turn a profit or internet property value past times 20% or more, or where the target is loss-making or inward a internet liability position, volition last dependent to listing rules.
    Companies volition demand to appoint an independent valuer for pregnant property disposals.
    Firms volition last asked to bring out cloth price- as well as trade-sensitive information, as well as whatever changes to near-term earnings prospects.


(Sept 19): AirAsia Group Bhd primary executive officeholder Tan Sri Tony Fernandes said he agrees alongside U.S.A. of America President Donald Trump's telephone phone for companies to number fiscal reports merely twice a year, rather than 4 times, equally it drives analysts to brand short-term decisions.

"One of the few things I concur alongside Donald Trump is quarterly reporting is cipher as well as void. Should last half-dozen months. Analysts driving to much short-term decision," he said via Twitter today.

My View:

a) QR should stay. Any listed company, big or small, should conduct maintain the dependent plain of existence able to await at their fiscal condition at ANY TIME, last it monthly or quarterly at the bare minimum. Half-yearly leaves likewise much room for things to happen. Influenza A virus subtype H5N1 company's administration should conduct maintain the wishing to last able to unopen their books at a week's notice. Financial dependent plain is paramount to whatever companionship that rides on audio administration as well as conduct maintain a unopen oculus on deviations. If a companionship needs to conduct maintain that, investors should last merely equally eagle-eyed.

b) QR may last lighter inward its requirements. Just the basic financials BS/CF/IS, summation commentary on noun changes to Debtors as well as Creditors, or whatever revaluations/disposals of significance. Keep it to the bare minimum.

c) QR does non as well as should non add together much fiscal burden on listed companies. As mentioned, all companies should last able to unopen their books within a week. Are you lot to say me monthly meetings obtain figures for give-and-take that are 6 months past? These are things all listed companies should last doing already.

d) QR would also "help to cut down the leeway" for the massaging of earnings. Enough said.

e) There is already insufficient information pertaining to the company's fundamentals. The sector's prospects as well as outlook are non existence highlighted sufficiently past times basic fiscal media. Only the exceed twoscore stocks inward Malaysia larn whatever cast of decent analyst coverage, what virtually the other 900? There is a dearth of "credible information" for local investors on local stocks. If The Edge tin honour a willing audience on a daily basis, shouldn't that say you lot investors demand amend information flow?

f) Half-yearly reporting also gives rising to "insider knowledge". The longer the reporting period, the higher the "value" that is accrued to insiders. Owners, board members, CFOs, accountants, corporate lawyers, manufacture followers, insider part movements, etc... all volition produce goodness to a greater extent than from Half-Yearlies than QR.

g) If you lot were a noun shareholder, would you lot last happy to exclusively larn a half-yearly update on your invested company? No. Why should normal investors last deprived of that information?

h) Does QR limits a company's long make planning? No. Why should curt term cost gyrations comport upon your companionship if your fundamentals are strong. Eventually all QRs volition fifty-fifty out positively if your long term fundamentals are good. Yes, stocks volition react to QRs, but these are the norm of a market, a daily marketplace seat house that tries to forwards discount a company's prospects. 

If you lot debate for long term reporting, why non written report all earnings inward ane calendar month as well as thence unopen the marketplace seat for ane year, thence written report again... that is equally preposterous equally eliminating QRs.