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MAS sets up review group to revitalise Singapore’s stock market
Timothy Goh
The review group will assess the current state of the local equities market and examine measures to address identified challenges. PHOTO: ST FILE
SINGAPORE - A new review group with representatives from both the private and public sectors will propose measures to revitalise Singapore’s struggling stock market.
Announced by the Monetary Authority of Singapore (MAS) on Aug 2, the panel will be chaired by Second Minister for Finance and MAS board member Chee Hong Tat.
Other members are MAS managing director Chia Der Jiun, Temasek chief executive Dilhan Pillay, Singapore Institute of Management chairman Euleen Goh, Singapore Exchange (SGX) chairman Koh Boon Hwee, Singapore Business Federation chairman Lim Ming Yan, and Mr Neil Parekh, who is a partner at investment firm Tikehau Capital.
Senior representatives from the Ministry of Finance, Enterprise Singapore and the Economic Development Board will also be on board.
The group will assess the current state of the local equities market, and examine measures to address identified challenges.
It will propose strategies to support and encourage SGX-listed companies to build capabilities and expand internationally.
It will also review the key elements of Singapore’s regulatory approach to foster an enabling ecosystem, including the listing regime.
Recommendations will be made to attract primary and secondary listings to the Republic. The group will suggest targeted measures to facilitate product offerings and improve liquidity in Singapore’s equity market, broadening the pool of potential initial public offerings.
It will also propose outreach and communication strategies to enhance the attractiveness of the local equities market, promoting it to issuers and investors.
MAS noted that a “deep and liquid” public equities market enables companies to access capital for regional and global expansion. It also allows asset owners and the investing public to participate in the growth of quality companies.
“Improving the attractiveness of Singapore’s equities market can therefore enhance Singapore’s standing as a vibrant enterprise and financial hub,” the central bank said.
“This, in turn, complements Singapore’s innovation and start-up ecosystem, private markets, as well as asset and wealth management sectors.”
MAS said that the review group will be supported by two work streams: The enterprise and markets work stream will address market challenges, foster listings and facilitate market revitalisation, while the regulatory work stream will focus on enhancing the regulatory regime to promote market growth and foster investor confidence.
Through the two work streams, the review process will involve stakeholders with experience in areas such as corporate finance, investment banking, asset management, legal services and corporate governance.
The group will recommend a set of measures and complete its report within 12 months.
Speaking to the media at the SGX on Aug 2, Mr Chee said that the Government has been engaging different stakeholders in recent months.
“I think everyone can see that there is a need for us to do something to improve the situation that we face today in Singapore, to make listing in Singapore a more attractive option for companies.
“This includes companies that are home-grown, start-ups that have grown and expanded in Singapore, and also companies that come from abroad that we want to attract and groom into a pipeline of good companies that we can list on the SGX.”
The move comes three years after a $1.5 billion fund called Anchor Fund @ 65 was established in 2021 by the Government and Temasek – Singapore’s investment company – to attract fast-growing companies to list on the local bourse.
When asked about the role that Temasek will play in the review group, Mr Chee said: “If there are good companies and good opportunities to invest in Singapore, both GIC and Temasek are able to do so.”
Regarding the market’s preference for certain SGX equities, such as Temasek-backed companies or real estate investment trusts, Mr Chee said: “We want to, as part of this review, look at how we can expand those opportunities and options for investors.”
An SGX spokesperson told The Straits Times that the bourse welcomes the announcement of the review group.
“Only a ‘whole-of-ecosystem’ approach can lead to transformative actions that will give fresh impetus to improving liquidity and listings in Singapore’s equities market.
“We will work closely with the review group, alongside our ongoing efforts to enhance our marketplace through new products, research and education, issuer and investor outreach, as well as regional partnerships.”
However, stockbrokers told ST that there are still potential issues, including concerns that 12 months to complete a report is too long, as well as the lack of public consultation and industry participation in the committee.
Mr Tng Kim Bock, a former stockbroker at Lim & Tan Securities, said about the new review group: “It’s more of the same thing, not a breakthrough.
“There is no market practitioner in the panel, and this may lead nowhere as the panel becomes an echo chamber... I think if the panel includes stockbrokers, the market will see a flip up.”
Other market players expressed support for the review group, but urged the committee to do more and work quickly to draw investors.
Mr Shane Chesson, vice-chairman of the Singapore Venture Capital and Private Equity Association, said the association will continue to highlight the quality of potential new listing candidates that can participate as part of a “rejuvenated SGX”.
The association in May submitted suggestions to MAS on how to boost trading on the local bourse and attract more firms to list in Singapore. These include requiring the private capital sector to participate in the stock market, and allowing money from pension and sovereign funds to be invested in locally listed companies.
Mr Chesson said: “We would emphasise that private capital participants, including many global players covering private equity, venture capital, limited partners, as well as legal and advisory groups, have increased on-ground resources and applied capital in Singapore in recent years and are aligned to this (market revitalisation) initiative.
“Timing is important to take advantage of this opportunity and not lose momentum.”
Securities Investors Association (Singapore) president David Gerald said that the retail investor watchdog is “encouraged” by the Government’s attention to issues such as low liquidity, the absence of quality listings, and underperformance relative to other developed markets, which have plagued the local stock market for several years.
“We hope the regulators can enhance the regulatory regime to foster investor confidence and facilitate market growth because it is good to have a vibrant and liquid market,” Mr Gerald said.
“One area which the new review group might consider is to follow the lead of Japan and South Korea, where listed companies are required to do more to unlock value from the perspective of investors.
“Another area for consideration would be to provide more investor education and free research findings on companies for all investors as a public service.”
Mr Gerald also noted that Temasek and sovereign wealth fund GIC should not be ruled out from investing in good companies in the local market.
“If good companies trading at good valuations exist on the SGX, Temasek and GIC should consider them.”
Mr Gavin Chia, chief executive of digital brokerage Moomoo, said that stock exchanges across the region have “upped their game” in recent years to attract more retail participation and enhance the quality of their offerings, which is why Singapore has to do more to ensure that it stands out in an increasingly competitive space.
He added: “While the challenges facing the local equities market are well documented, trading data from Moomoo Singapore shows that it remains an attractive market for investors in Singapore, given its relative stability and their familiarity with the listed entities.”
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