SINGAPORE - In a bid to raise Singapore's status as an enterprise financing hub, a $75 million grant has been launched to defray costs of enterprises hoping to list on the Singapore bourse, support research initiatives and subsidise the salaries of Singaporean equity research analysts.
The Grant for Equity Market Singapore (Gems) was launched by Finance Minister Heng Swee Keat at a UBS wealth insights conference at the Marina Bay Sands Expo and Convention Centre on Monday (Jan 14) morning.
Funded by the Monetary Authority of Singapore (MAS) and administered by the Singapore Exchange (SGX), the grant has several components to it, and follows other programmes for the bond and private equity market launched in previous years.
Gems will kick in from Feb 14.
To support the fund-raising needs of companies when they choose to list on the SGX, a listing grant will be given out to eligible companies - including foreign enterprises but excluding real estate investment trusts and business trusts - helping to defray the costs involved, such as legal and underwriting fees.
All eligible firms will be able to receive up to 20 per cent of the funds for their listing expenses up to a cap of $200,000, while those in high growth sectors with a minimum market capitalisation of $300 million will enjoy a higher cap of $500,000.
These high growth sectors include those in the digital cluster, advanced manufacturing, hub services, logistics, urban solutions and infrastructure and healthcare.
Technology companies - including fintech, consumer tech, on-demand services and gaming services and peripheral manufacturers - with a $300 million market capitalisation will benefit most, as the grant allows them to co-fund their expenses by 70 per cent, up to $1 million.
In addition, a research talent development grant, primarily for listed mid- and small-cap enterprises, will fund 70 per cent of the salaries of fresh graduates hired as equity research analysts, as well as 50 per cent of salaries for re-employed and experienced analysts.
The MAS will also earmark funds to crowdsource initiatives aimed at boosting the equity research ecosystem, supporting research such as industry or sector primers, and other innovative ways to distribute research and disseminate other enterprise information to investors.
The grant comes after a dismal performance for SGX initial public offerings (IPOs) last year, having raised the second lowest IPO funds in the past decade amid strong competition from other regional exchanges for big listings and the ongoing United States-China trade conflict.
MAS assistant managing director Ng Yao Loong said Gems will help strengthen Singapore's position as the "go-to venue in Asia for enterprises seeking growth financing".
"Singapore has been working to enhance our private and public markets so that domestic and international growth enterprises are able to access different types of capital best suited to their needs," said Mr Ng.