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SGX RegCo partners SISV to raise valuation standards

SGX RegCo partners SISV to raise valuation standards

Source: Business Times
Article Date: 16 Oct 2019
Author: Marissa Lee

The regulatory arm of the Singapore Exchange (SGX RegCo) is joining hands with the Singapore Institute of Surveyors and Valuers (SISV) to set standards for property valuation for public companies here.

The regulatory arm of the Singapore Exchange (SGX RegCo) is joining hands with the Singapore Institute of Surveyors and Valuers (SISV) to set standards for property valuation for public companies here.

Under a pact inked on Tuesday, the institute will provide SGX RegCo with expert advice and support in reviewing whether property valuation reports are conducted and prepared in compliance with the applicable standards and guidelines.

The initiative aims to raise investors' confidence in asset valuation reporting by listed issuers.

Tan Boon Gin, chief executive of SGX RegCo, said: "Robust property valuations are crucial to Singapore's standing as a leading hub for Reits and property companies. SGX-listed Reits are acquiring more diverse and offshore assets and the standard of valuations should be enhanced so as to mitigate any potential risks."

Where SGX RegCo has any concerns, it may also refer property valuation reports or disclosures made by public companies or listing applicants to the institute.

Separately, SGX RegCo is collaborating with the Institute of Valuers and Appraisers, Singapore (IVAS) to raise the standing of the valuation profession as well as the quality of valuations performed. Under this collaboration, SGX RegCo will pass case information to IVAS, for it to assess whether those valuers concerned upheld the proper codes and standards in their valuation of businesses.

Harsha Basnayake, chairman of the IVAS Council and Asia-Pacific managing partner for transaction advisory services at Ernst & Young, said: "IVAS welcomes regulatory initiatives to raise the bar for valuers. We require that all Chartered Valuers and Appraisers (CVA Charter holders) adhere to high standards of ethics and professionalism."

In the past, stock market investors have questioned the methods of some independent valuers.

At an extraordinary general meeting in 2017, investors grilled Sabana Reit's independent property valuers because they did not understand how Savills, Knight Frank and Colliers had all come up with the same S$23 million valuation for a building. That was also the price at which the Reit sponsor sought to sell the building to the Reit, after originally paying S$10.9 million for it.

Source: Business Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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