SGX shares fall 5.8% a day after first proposed measures to boost stock market unveiled
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The proposed measures include tax incentives to attract more enterprises and fund managers to list in Singapore.
ST PHOTO: GIN TAY
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SINGAPORE - Shares of the Singapore Exchange (SGX) were down 5.8 per cent to $12.69 at the close of trading on Feb 14, a day after the first proposed measures to revive trading on the bourse were unveiled.
A review group led by the Monetary Authority of Singapore (MAS) proposed measures that include tax incentives to attract more enterprises and fund managers to list in Singapore, and options aimed at helping local enterprises gain easier access to growth capital here.
The MAS did not elaborate further on the initial measures, saying that more details will be shared on Feb 21.
The measures have been submitted to Prime Minister and Finance Minister Lawrence Wong.
The review will also continue to work on the next set of measures to foster the stock market’s longer-term development and sustainable growth, which will be presented in the second half of 2025.
While noting that further measures to revive the exchange have yet to be announced, Citi analyst Tan Yong Hong in a Feb 13 report nevertheless downgraded his 12-month share price target for the SGX by 9 per cent to $11.90 from $13.10 previously.
He noted the market’s disappointment at the initial measures proposed, and is expecting the optimism that drove a 25 per cent rally in the stock in the six months since the review group was formed in August 2024 to fizzle out.
Second Minister for Finance and MAS deputy chairman Chee Hong Tat said on Feb 13 that the review group does not recommend requiring sovereign wealth fund GIC and the Central Provident Fund (CPF) to invest in local stocks.
Explaining the rationale for this, Mr Chee, who also chairs the review group, reiterated that “GIC’s mission is to preserve and enhance the international purchasing power of Singapore’s reserves”, and added that he does not believe it is sustainable to use such an approach.
He said GIC’s funds support key national objectives,
Citi’s Mr Tan said the review group recommending against the use of funds under GIC and CPF for domestic equities could “reduce hopes of a supercharged investment inflow, which could have benefited broader market valuation”.
RHB analyst Shekhar Jaiswal, in a Feb 13 report, noted that the trading volume of derivatives and total value of stocks traded on the SGX for the month of January came in “significantly lower” than expectations.
He expects this trend to continue for the rest of the SGX’s financial year despite higher trading activity in real estate investment trusts and stocks on the Straits Times Index.
Mr Jaiswal added that the SGX’s earnings growth outlook remains dependent on strong sentiment in the local stock market, an increase in new listings and a favourable outcome of the ongoing review.
He has kept his target valuation for the SGX at $12.80.
