Review group’s measures to revitalise S’pore equities market not enough to drive permanent change: WP

SINGAPORE - The recommendations put out by the review group seeking to revitalise the Singapore equities market are still not enough to drive permanent change, said Workers’ Party MP Louis Chua in Parliament on Feb 3.

Mr Chua (Sengkang GRC) was commenting on the measures to bolster Singapore’s capital markets, as recommended by the Equities Market Review Group set up by the Monetary Authority of Singapore (MAS) in August 2024.

In response, Minister for National Development and MAS deputy chairman Chee Hong Tat said the review group has achieved initial success in boosting the market, but that there is no silver bullet that can simply solve all problems.

Mr Chua in an adjournment motion said he appreciated the group’s work and welcomed the

$5 billion programme to allocate funding to asset managers

to boost liquidity in the market.

“However, I believe that the current recommendations by the review group may be necessary but not sufficient to truly drive permanent change,” he said.

“The two work streams appear to be focused on reducing market friction, rather than instituting structural interventions that improve company fundamentals in the long term.”

The two work streams are the enterprise and market work stream, which focuses on encouraging listings and increasing investor participation, and the regulatory work stream, which focuses on improving the listing process and strengthening investor recourse.

Mr Chua pointed out that too many listed companies are currently generating “uncompetitive returns”.

He noted that 61 per cent of listed firms generated returns on equity below 8 per cent, and only 14 companies have daily trading volume above US$20 million (S$25.4 million).

To get firms to value-up, Mr Chua recommended making it mandatory for companies to provide value-up disclosures. “At the most basic level, all listed companies should conduct formal board-level assessments of capital costs, profitability and market valuation,” he said, adding that firms should disclose quantified return on equity targets and spell out specific plans with annual progress reporting, for instance.

He also suggested strengthening corporate governance and enforcement actions when companies do not comply.

“I understand the Government’s perspective that value creation is the responsibility of boards and management, not regulators. Regulators should not micromanage,” Mr Chua said.

“But regulators have to maintain standards that protect investor confidence, ensure fair and timely disclosure, and enforce meaningfully against wrongdoers.”

He noted that in the shift towards a disclosure-based regime, there might be concerns about investor protection.

Mr Chua mentioned his own experience as a sell-side analyst covering Noble Group, which caused investors to lose billions when the company met its downfall. He added that the

group faced penalties by MAS

, but these seemed disproportionate compared with the losses investors had to bear.

“There perhaps ought to be more robust disclosure obligations and enforcement actions relating to false and misleading statements and breaches of disclosure requirements,” he said.

In addition to Mr Chua’s suggestions, Associate Professor Jamus Lim (Sengkang GRC) from WP said that reforms could also be made to enrich the capital-raising life cycle.

“Improving the life cycle for capital raising requires us to look at the full stack for corporate finance: from angel through different stages of venture investments by private equity, to initial public offerings (IPOs) on a secondary board, followed by possible graduation to the main board,” he said.

Prof Lim observed that the angel market in Singapore is “mature, but shallow”, with a liquid funding environment and close to 24 angel and seed investment networks.

He also noted Singapore’s Temasek’s shift from investing in early-stage start-ups to focusing on firms in later funding rounds.

“But it is also vital that the institution deepens domestic liquidity for later venture capital stages, which leads me to favour an even stronger focus on pre-IPO stage, with a clearer mandate to target locally based companies,” he said.

Prof Lim added that there should be more incentive for firms to list on the local board, especially the Catalist.

“We must shore up our local listings on the Catalist to increase its attractiveness as an exit destination for our otherwise robust earlier-stage venture ecosystem,” he said, noting that the low number of new Catalist listings also limits trading and turnover.

More can also be done to promote bottom-up stock ownership, Prof Lim said. This could mean enlisting family offices and private-sector institutions, instead of just having public-sector initiatives to boost the stock market.

He said retail investors can also increase participation in the stock market.

“The Central Provident Fund Investment Scheme already allows an opt-in for Singapore-listed shares on the SGX (Singapore Exchange). It will be a small leap to further promote responsible retail ownership of a local market index, ideally through revisions to the Lifetime Retirement Investment Scheme, or through additional educational incentives,” he said.

Ensuring timely implementation, taking risks and continuously adapting

In response, Mr Chee said he welcomes feedback and takes Mr Chua’s point that some requirements may have to be made mandatory for companies, and that the Government is open to looking into these.

“But I hope Mr Chua will agree with me that not everything that can add value to the company needs to be mandated, because the companies themselves would have strong commercial interests to make sure they can increase their market value,” he said.

He added that the MAS and relevant authorities will work closely on robust investigations and market surveillance, as well as enforcing against breaches in a timely manner.

Mr Chee also said that Prof Lim is right that Singapore has to look into how the market can facilitate companies to grow.

But he also noted that without good shareholder returns, company growth will not be achieved, and both go together.

Mr Chee noted that the strategy of the review group is to make Singapore’s market more attractive on its own merits, so that capital flows to Singapore because the opportunities are attractive and the ecosystem as a whole is strong.

“We’re not trying to go for a silver bullet that can, on its own, solve all the problems. There’s no magic pill,” he said.

He added that the measures aim to build capabilities in fund management and in listed companies’ ability to enhance shareholder value and engage investors.

This is done by investing in market infrastructure so that investors and issuers choose Singapore because they are convinced that this makes commercial sense and has longer-term strategic value for them, he noted.

“Our goal is to build an equities market where companies sharpen their attention on shareholder value creation, communicate their strategies clearly, optimise capital allocation and thus deliver good shareholder returns.”

Mr Chee noted that progress has already been made in boosting the local market, as the average daily traded value of securities in 2025 was

the highest since 2010

.

IPO activity also

rebounded significantly in 2025

, with more than $2.4 billion in total funds raised, which is the highest level since 2019.

“I hope this positive momentum continues, but we know markets have ups and downs. Our focus therefore must be to continue strengthening the competitiveness and attractiveness of our ecosystem,” Mr Chee said.

To this end, he said that implementation is key to translate policy ideas into market outcomes.

Some of the measures have already been rolled out, with $3.95 billion out of the $5 billion allocated to nine asset managers.

Other initiatives are on track and will be implemented over the course of the year, Mr Chee said.

Besides implementation, innovation in policy also involves taking calculated risks, he noted.

But guard rails will be put in place where necessary, he assured. This involves putting more resources into investor education, for instance.

“When we shift towards a more disclosure-based regime with regulation that is more focused and facilitative, we continue to seek high-quality listings and provide adequate and timely information for investors to make their decisions,” he added.

Finally, Mr Chee said that improving competitiveness is a continuous journey.

“Although our efforts have yielded some initial success, we cannot stand still and rest on our laurels because the competition for global capital is intense and fast-evolving,” he said, adding that developing a vibrant equities market is not a one-off campaign but a multi-year effort.

“We have laid the foundations and set in motion a comprehensive programme. If we keep at this work in close partnership between Government and industry... I am confident that Singapore’s equities market will grow in depth, resilience and attractiveness in the years ahead.”