Singapore’s financial regulator is planning to inject nearly $4bn into the country’s stock market in a bid to reverse a decline in the number of listings.
The Monetary Authority of Singapore announced a package of measures on Friday to help turbocharge the city-state’s equity market, which has suffered from more delistings than initial public offerings in recent years.
Among the proposals — which included tax incentives for companies and investors, along with a more streamlined listings process — was a plan to invest S$5bn ($3.7bn) in funds that are focused on the local equity market.
Chee Hong Tat, second finance minister and deputy chair of MAS, said the intention of the investment was to “grow the capabilities and to grow the fund management industry here in Singapore”.
He added: “We want the mandates to include focus on Singapore equities so that will also help to increase the interest and the investments trading in Singapore equities.”
MAS will invite domestic and international investment groups to pitch to receive the investments and will allocate the funds in the second half of the year, according to people with knowledge of the plans.
Like many stock markets around the world, Singapore has been struggling to attract companies to go public in recent years, with many of its biggest names opting to list in the US.
The number of companies listed on SGX, Singapore’s stock exchange, hit a two-decade low last year, falling to 617 from a high of 782 in 2013.
Shein, the Chinese fast-fashion business based in Singapore since 2022, is considering a London listing with a potential £50bn market valuation, which would make it one of the UK’s largest public companies. Several of Singapore’s best-known businesses, including delivery app Grab and ecommerce group Sea, have opted for New York listings in recent years.
Last summer, the Monetary Authority of Singapore launched a review of the country’s equity markets, with a panel that included the heads of the SGX, MAS and Temasek, the state-owned investment company.
This week, Singapore Prime Minister Lawrence Wong set out a series of tax breaks in his Budget speech that had been proposed by the MAS review.
The group also proposed streamlining the listings process and reducing the review period for any IPO to between six to eight weeks.
Loh Boon Chye, chief executive of SGX, said: “The initiatives announced thus far will jump-start more capital into the capital markets ecosystem and stimulate interest in local stocks and listings.”
But analysts have questioned whether the measures go far enough to reverse a global phenomenon of companies choosing to stay private for longer, or favouring listings in bigger markets such as the US.
Yong Hong Tan, an analyst at Citigroup, said the tax incentives would “likely [be] seen as ‘goodies’ to fund managers already meeting [set] requirements but are potentially insufficient to attract incremental inbound allocation”.
