Source – straitstimes.com
New Review Group Established
The Monetary Authority of Singapore (MAS) has announced the formation of a review group tasked with strengthening Singapore’s stock market. The decision comes after the Singapore Exchange (SGX) faced a challenging year for new listings. Led by Second Minister for Finance Chee Hong Tat, the review group will include key figures from both the private and public sectors. Notable members include MAS Managing Director Chia Der Jiun, Temasek Holdings CEO Dilhan Pillay, and Finance Ministry Permanent Secretary Lai Chung Han. The group is expected to provide recommendations within the next 12 months.
Stock Market Performance Issues
The review group’s formation highlights ongoing concerns about Singapore’s stock market. The SGX had only one initial public offering (IPO) in the first half of 2024, following a disappointing six IPOs in 2023, compared to 11 in 2022. According to Deloitte, the total funds raised in 2023 amounted to just US$35 million, a dramatic 92% decrease from the previous year. In contrast, Hong Kong, a key competitor, conducted 68 IPOs last year, raising US$5.3 billion. Additionally, the SGX has seen a notable number of delistings, with at least 10 exits recorded in the first five months of 2024.
Enhancement of Local Stock Market to Be Focus of New Review Group: Chee Hong Tat
Review Group’s Objectives
Chee Hong Tat emphasized the need to improve the attractiveness of Singapore’s stock market for both domestic and international companies. The review group will focus on two main areas: addressing market challenges and revitalizing listings under the Enterprise and Markets workstream, and enhancing the regulatory framework to build investor confidence under the Regulatory workstream. The group will engage experts from various fields, including corporate finance, investment banking, asset management, and corporate governance.
Importance and Future Steps
MAS highlighted the critical role of a vibrant equities market in capital formation and its contribution to Singapore’s status as a financial hub. The review group will evaluate current market conditions and efforts, propose strategies to attract listings and suggest ways to improve liquidity. Additionally, the group will work on outreach and communication strategies to enhance the market’s appeal.
Despite suggestions for increased investment from sovereign wealth funds like GIC, Chee Hong Tat indicated that such investments alone are not a solution. Both Temasek Holdings and GIC will continue to seek the best returns, with GIC expressing openness to investing in promising Singapore-based companies with global potential.
Temasek Holdings has stated that revitalizing the stock market is not its primary concern, while GIC focuses on global opportunities, potentially including Singapore-based firms with strong international prospects.
