SINGAPORE: A review group set up to strengthen the local stock market has announced new initiatives aimed at increasing interest from both retail and institutional investors, while also improving trading liquidity.
The Monetary Authority of Singapore (MAS) will launch a S$5bil programme through which it will partner with selected fund managers to invest in Singapore stocks, it said last Friday.
Regulations will also be streamlined to make the listing process more efficient, and to be more focused and facilitative of listings, MAS said.
The updates come in addition to tax incentives announced in Budget 2025 to get more companies and fund managers to list on the Singapore Exchange (SGX), as part of measures to boost the local equities market.
The aim is to cultivate more quality initial public offerings (IPOs) to pique investor interest, as well as build a greater range of Singapore-focused funds to boost institutional activity and shareholder involvement in listed companies, MAS said.
The measures announced are also expected to encourage broader investor participation in the local stock market beyond the 30 counters listed on the Straits Times Index, MAS said.
Second Minister for Finance Chee Hong Tat said the focus was on making the local stock market attractive to companies in Singapore and the region that may not be able to sustain investor interest in bigger exchanges in the United States.
“Our approach was to look at the feedback and ideas that we have received, and also to work on strengthening the foundations and the elements of our equities market,” said Chee, who is also transport minister and MAS deputy chairman.
“We are not looking for just one silver bullet, because there isn’t one. We want our approach to be comprehensive, holistic. So we want to try and address different aspects of the market that can have a positive impact on the overall attractiveness and competitiveness.”
The S$5bil Equity Market Development Programme (EQDP) that the MAS will launch will be funded from its investment portfolio and the Financial Sector Development Fund, which provides grants to firms and individuals in the financial-services sector.
The programme will invest in a range of funds managed by local as well as foreign fund managers based in Singapore.
Eligible fund strategies include those that invest in Singapore equities, or invest a substantial component in Singapore equities as part of a regional or thematic focus.
The strategies should be actively managed, commercially viable and work towards attracting capital from other commercial investors including institutional funds, family offices and other private entities, MAS added.
MAS will start the process of evaluating eligible fund managers and strategies over the next few months.
The EQDP will be complemented by tax exemptions, such as those on a fund manager’s qualifying income derived from funds investing substantially in Singapore-listed equities, as announced by Prime Minister Lawrence Wong in the Budget 2025 statement.
The Global Investor Programme will be calibrated to support more capital inflows into Singapore-listed equities.
The programme was set up to attract entrepreneurs, business owners and high-net-worth individuals who are interested in making significant investments in Singapore.
It also requires applicants to invest in Singapore’s economy through business expansion or funds managed here, thereby fostering economic growth, MAS said.
Currently, the programme’s applicants investing under the Family Office option must establish a single family office with assets under management of at least US$200mil.
Of that, a minimum of S$50mil must be deployed into qualifying investment categories consisting of listed equities, real estate investment trusts, and other non-listed Singapore-based operating companies, among others.
Going forward, the qualifying investment categories will be narrowed to only equities listed on approved Singapore exchanges, MAS said.
In addition, MAS will expand the research development grant scheme under its Grant for Equity Market Singapore (Gems), which was introduced in 2019 to support listings and expand the equity-research ecosystem here.
To boost the local markets, the review group recommended an expansion of Gems’ research grant to include research coverage on pre-IPO companies and mid and small-cap enterprises.
MAS said: “Expanding research coverage to pre-IPO companies helps raise awareness of pre-IPO companies, which better supports investor demand and valuations when such companies eventually IPO in Singapore.
“This will strengthen the pipeline of quality listings, and support research on new high-growth sectors like technology, sustainability, and fintech and innovation.”
More details will be released around mid-2025. — The Straits Times/ANN