Revised Minimum Bid Sizes

You would have noticed that the minimum bid size was revised if you had traded a security above $3.00 in STI today. This was announced on 19th Sep 07 and commenced on 24th Dec 07.

Security Below $1.00 - Minimum bid size = $0.005 (No Change)
Security between $1 to $2.99 - Minimum bid size = $0.01 (No Change)
Security between $3 to $9.99 - Minimum bid size = $0.01 (Reduced from upto $0.05)
Security Above $10 - Minimum bid size = $0.02 (Reduced from $0.10)

In my view,

1) This can improved liquidity. If you have DBS shares at $20, you can sell at $20.04 instead of waiting for a buyer at $20.10.
2) No good for speculators. If you have 10 lots of Cosco at $6.00 ($60,000), the next bid to sell is $6.05 ($60,500), just one bid change, you can make a profit of $500. Now, one bid change is only $0.01 ($60,100)
3) Such change is good for brokers and SGX as more trades are expected to be done. May not necessary be good for retail investors. Share price movement is smaller, hence profitability from trading may be reduced.