Size matters. And when it comes to investment decisions, it matters a lot, because size represents the breadth and depth a market offers to investors with varying degrees of risk appetites.

Singapore, with a population of around five million, has achieved a lot more than what may have been expected of it a few decades ago.

Still, the constraints of a maturing labour force that is also not growing fast enough started to become more visible at the turn of the decade, with a labour force participation rate of around 67 per cent for most of the period.

The limitation is now showing in everything, from the rate of economic expansion to private consumption and all the way to the growth of its capital markets.

To be sure, size isn't the only hurdle. For an open economy like Singapore, global economic and business cycles, and shocks transmitted through fluctuations in commodity prices and monetary and currency policies of top trading partners are critical.

Yet the depth of the market is a domestic constraint - you either learn to live with it or do something to fix it.

Singapore's shrinking stock market, in some ways, best represents the structural and cyclical challenges that popped up through the decade that's about to end.

The early days of the period were overshadowed by the global financial crisis and the later part by surging nationalism and protectionism. The US-China trade war is a case in point.

The monetary policy response to the 2008 crisis sent massive amounts of liquidity sloshing around the globe.

At home, both the gross domestic product (GDP) and corporate earnings growth slowed. It could be that protectionist and nationalistic tendencies limited some Singapore companies from expanding abroad.

The easier policy environment sent investors scurrying around the world for higher yields and valuations. That took some money off the table from certain asset classes in destinations like Singapore, where the currency is managed within an undisclosed band to guard against imported inflation and ensure exports remain competitive.

Low interest rates also widened options for fund-raising, especially for start-ups, drying up the initial public offering (IPO) pipeline worldwide.

However, the financial stability allowed by Singapore's monetary policy has helped attract private equity and hedge fund managers.

Meanwhile, the number of listed securities on the Singapore Exchange (SGX) peaked at 782 in 2010 and has since dropped to 728 as of last month.

As delistings have been outnumbering IPOs in recent years, SGX's market capitalisation has shrunk from about $1 trillion in 2017 to $935 billion as of last month.

The contracting market cap has decreased the gap with some emerging markets in the region like Thailand, Indonesia and Malaysia, heating up the competition for new listings.

While SGX market cap is still about three times the size of the economy, the shrinking size doesn't go well with most big liquid-asset managers.

In the wake of these structural and cyclical challenges, liquidity, trading activity and valuations eased. That turned cash-rich companies with strong brand franchise into acquisition targets.

Most of the companies that were delisted didn't actually crash out of the market. They were bought out by private equity investors or privatised by major shareholders and in some cases were relisted elsewhere in the region.

The low liquidity and trading activity are more of a structural issue. They are essentially a function of the size and risk appetite of domestic retail investors.

Singaporeans are, in general, big savers. They prefer safe investments like real estate and insurance policies. That has swelled the household debt to about 65 per cent of the GDP, leaving little, if any, savings to play around with higher-risk assets such as equities.

So while many Singaporeans would generally be all right with buying shares in companies with fat profits that regularly pay small dividends, few would take a risk with a small start-up or a growth company, where the returns could be much higher - in the form of a bigger margin on the stock price, for instance.

That's a serious constraint, given there aren't many examples of stock markets that have grown without a large, risk-taking domestic retail-investor base providing the liquidity for big institutional investors to play with.

Given all that, SGX hasn't fared too badly. In terms of market access for smaller firms, Singapore ranks among the world's top 10 exchanges. This year, it was ranked the fifth-largest exchange globally in cross-border listings.

Two of the cross-border listings were US Reits. That is an encouraging trend which may boost depth of the property sector.

An SGX spokesman said yesterday: "The market may continue to witness growth in private markets, as corporations and institutional investors seek additional investment opportunities outside of public markets.

"However, this may not necessarily indicate a complete shift from public to private markets, but rather a lengthening of the private-to-public cycle."