When it comes to capital markets, liquidity is the quiet hero everyone needs but rarely talks about. Sure, fundamentals are king, but if your stock doesn’t have the trading flow to match, it’s like running a marathon in flip-flops – you’re not going to get far.
Why liquidity is a big deal
Want to stay competitive internationally? Liquidity is your ticket. Over in Europe, most listed companies make it a priority by teaming up with liquidity providers. The payoff? Their stocks are priced better, investors feel safer and liquidity risks are kept to a minimum. Now, if you’re a company in Singapore trying to take on these global heavyweights, ignoring liquidity is like showing up to a sword fight with a spoon. You need it to stay in the game.
Liquidity is like a frenemy: unpredictable and unstable
Just because you have liquidity today doesn’t mean it’ll stick around. Markets are tricky like that. One day, your stock is trading like a dream; the next, market frictions pop up out of nowhere. And here’s the kicker: these frictions aren’t even tied to how great your company is. They’re just a side effect of how buy and sell orders flow – or don’t flow. The result? Unnecessary volatility that makes your stock look more chaotic than it really is.
Liquidity is the valuation secret sauce
Here’s the math: better liquidity means better valuation. Why? Because a liquid stock doesn’t scare investors. But if your stock is harder to trade, investors start demanding higher returns for the hassle, which drags down your valuation. This is what’s known as the liquidity discount and, trust us, it’s not the kind of discount you want.
Enter the liquidity provider: your market MVP
So, how do you keep your stock in tip-top shape? With a liquidity provider. Think of them as the pit crew for your shares, keeping things running smoothly throughout the trading day. They minimize those pesky frictions, make trading your stock easier and help you stay on investors’ good sides.
At DeltaBlock, we specialize in being that trusted liquidity partner. We currently assist several listed companies on SGX, providing solutions that ensure their stocks stay active and attractive to investors. Our proven approach not only improves trading liquidity but also enhances valuation and investor confidence.
The bottom line is that liquidity isn’t just nice to have – it’s a must-have if you want to play (and win) in the global arena. And with DeltaBlock in your corner, you’re set to make a lasting impression.
Maria Scetta is CEO and co-founder of Europe and Asia-focused DeltaBlock
