SINGAPORE (Bloomberg): A Singapore government-led review group proposed incentives to revitalise the stock market, the first steps taken in a market plagued by low liquidity and a dearth of new listings.
The proposals include tax measures to attract more listings in Singapore, as well as the launch and growth of funds with substantial investment in domestic equities, according to a statement from the Monetary Authority of Singapore on Thursday.
The review group will provide a fuller update on its first set of measures on Feb. 21.
The next set of initiatives will focus on fostering longer-term development and growth of the stock market, which will be announced in the second half of the year.
Singapore set up a task force in August led by Second Minister for Finance Chee Hong Tat to help rejuvenate its equities market. Members include representatives from the MAS, state investment firm Temasek Holdings Pte, Singapore Exchange Ltd. and other public and private sector participants, with a goal to submit proposals by this summer.
"This is a challenging task with no easy solutions, as a significant proportion of global capital is now concentrated in a small number of major stock exchanges,” said Chee. The set of measures are "aimed at helping Singapore enterprises access growth capital and attracting quality enterprises with a regional presence to list in Singapore.”
Shares of SGX fell as much as 6.3% on Friday, the most in five months. The stock is also retreating from its highest level in 17 years reached last week.
While there were expectations for greater support from local funds, Chee said the review group doesn’t recommend requiring sovereign wealth fund GIC Pte or the Central Provident Fund to invest their funds in domestic equities. "I also do not believe that it is sustainable to use such a ‘pump-prime’ approach,” he said.
The limited direct public funding, in turn, "could reduce hopes of a supercharged investment inflow, which could have benefited broader market valuation,” Citigroup Inc. analysts including Arthur Pineda wrote in a note. The brokerage downgraded SGX shares to sell from buy, saying the optimism on reform measures has been priced in.
The city-state’s equities market has been grappling with tepid trading volumes, while delistings from the local bourse have frequently outnumbered new debuts. There were only four IPOs on the Singapore stock exchange in 2024 totaling $34.4 million, the second-lowest in more than two decades, data compiled by Bloomberg show.
Still, things may be poised for a turnaround as some bankers touted a slew of companies potentially looking to list in Singapore depending on market conditions. The benchmark Straits Times Index has risen about 2% this year after posting its best performance since 2017 last year, driven by a strong rally in banks.
--With assistance from David Ramli. -- ©2025 Bloomberg L.P.
