New moves can help to draw more listings, raise interest in S’pore stock market: Observers

SINGAPORE - A slew of measures by the Monetary Authority of Singapore (MAS) to reform and strengthen the local stock market can help to draw more listings and raise investor interest, market watchers said.

They were responding to news on Feb 21 that

MAS will launch a $5 billion programme

through which it will partner with selected fund managers to invest in Singapore stocks, while streamlining regulations to help facilitate listings, among other measures.

These measures were part of recommendations by a review group set up by MAS in August 2024 to revive the Singapore stock market.

Mr Shane Chesson, vice-chairman of the Singapore Venture and Private Capital Association, said that the initiatives can change perceptions and help the Singapore Exchange (SGX) attract good companies.

These include companies that are ready to list, but are not ready or not interested in bigger exchanges in the United States. Hence, SGX can be a “great destination” for them.

“If they all think that SGX is interesting to pursue, you’ll have a cohort,” said Mr Chesson, who is also the founding partner of Openspace, a venture capital and growth stage fund manager.

He noted that a cohort of five to 10 companies listing within a similar timeframe can showcase the different sectors and opportunities that Singapore’s stock market offers.

“That would help to create a massive change of perception. And as long as they list well, as long as the investors at IPO actually make money, then the whole thing becomes self-reinforcing,” he said.

Enterprise Singapore chairman Lee Chuan Teck said the companies that SGX is targeting are those that are not so large, have operations in Singapore and the region, and with local brand recognition.

“For many of these companies, when we spoke to them about listing in Singapore, their concerns are the usual ones. They are looking for investor liquidity, valuation, they are looking for less regulatory burdens. And so these are the things that we seek to address in this first set of measures,” he added.

The $5 billion programme is also useful in attracting a variety of investors, BlackRock said.

Ms Deborah Ho, its country head of Singapore and regional head of South-east Asia, said: “It is a catalyst because it’s to accelerate interest in the market and at the same time, be able to create the kind of breadth and velocity in the market that will attract a wide variety of investors.”

SGX also welcomed the measures and said it is supportive of the proposals.

SGX group chief executive Loh Boon Chye said it is a milestone and a significant step towards strengthening the competitiveness of Singapore’s equities market.

“The initiatives announced thus far will jump-start more capital into the capital markets ecosystem and stimulate interest in local stocks and listings,” he added.

He noted that the improvements in regulation and the move to disclosure-based principles rather than merit-based ones will support demand and supply of listings.

“Market discipline will play a bigger role going forward. We will work closely with MAS to prepare for these changes and recognise that sustained collaboration, concerted efforts and speedy implementation of the measures are essential to navigate evolving market dynamics,” he said.

Mr David Gerald, president and chief executive of Sias, said that while the measures are mostly targeted at fund managers, these moves can also spark interest among retail investors.

“When retail investors see fund managers going into listed companies, they would want to know why, and whether there’s a good story there,” he said, calling the $5 billion programme a “brilliant move”.

“It will mean a lot to retail investors to see institutional investors taking an interest in these companies, so I think the laggards can be revitalised and looked at differently.” 

Mr Gerald also noted that he expects Singaporeans “with the money to invest” to start thinking about investing in local equities.

“It will be interesting... The young investors who typically access the US markets may reconsider, if they know they can make money here,” he said.

Temasek chief executive Dilhan Pillay agreed that the measures represent the most significant changes that are being made to the Singapore securities markets since the reforms of the late 1990s to early 2000s.

But the changes will need to be phased in, he said, noting that the review will need to balance a forward-looking approach with investor protection.

“The key is to remain a trusted jurisdiction for all participants in the Singapore securities markets,” he said.