SGX to probe into valuation practices by listed issuers

Singapore Exchange and Singapore Institute of Surveyors and Valuers will be forming a committee that will review valuation practices by listed issuers.

SGX Logo. Reuters

The Lion City's local bourse operator, Singapore Exchange, will be reviewing valuation practices and the reporting facilitated by real estate values that listed issuers engage.

SGX will be partnering with the Singapore Institute of Surveyors and Valuers (SISV) in probing into the valuation and reporting practices of issuers.

This follows SGX's earlier engagement with professionals from industries such as the real estate, financial auditing and valuation to better understand how reportings are done and how information is relayed.

According to a statement released by SGX, investors depend on real estate valuations when making decisions on investments in REITs and business trusts.

SGX Head of Listing Policy & Product Admission Michael Tang said quality valuations are crucial in protecting investor interest and maintaining confidence in REITs and business trust sector.

"SGX is committed to collaborating with the entire eco-system to improve governance and disclosure. We welcome this opportunity to work with the SISV to review valuation practices and how valuers come up with valuation reports. We believe investors will benefit when valuation reports contain clearer information on methodology and key assumptions," Tang stated.

SISV President of Valuation and General Practice Dr Lim Lan Yuan noted that this is particularly important as competition in the industry heats up.

"This is timely as the need for enhancing the valuation reporting requirements has been the Institute's key objective over the years with the increasing competition in the industry," Lim said.

He furthered, "We are certainly very happy to have the support of SGX and industry stakeholders to work on this together with the Institute and to set effective disclosure requirements which not only will benefit the valuation industry, but more importantly, to raise Singapore's attractiveness as a safe investment haven in the global business environment today."

The two institutions will be forming a separate committee to carry out the review. The reviewing committee will include representatives from stakeholder groups which will be responsible for identifying and recommending enhancements to the disclosure framework for real estate valuation and reporting in Singapore.