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$5 billion programme through which it will partner with selected fund managers to invest in Singapore stocks, it said late last week.

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 totax 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 US.

“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 Mr 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.”

Boosting investor interest and liquidity

The S$5 billion 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.  

New moves can help to draw more listings, raise interest in S’pore stock market: ObserversMAS review group to study Catalist board, expand investor protection in next set of measures

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 2025 Budget statement.

The Global Investor Programme will be calibrated to support more capital inflows into Singapore-listed equities.

This 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 S$200 million.

Of that, a minimum of S$50 million 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.”

Resilient banking earnings, better IPO conditions could bolster S’pore’s STI in 2025: AnalystsDBS in talks with Singapore IPO candidates, some with potential S$1.35 billion valuations

The review group also recommended adopting a more business-friendly regulatory stance, alongside other measures to strengthen investor confidence by moving the SGX towards a more disclosure-based regime. 

This means companies seeking to list here are required to provide detailed information about their business, financials, risks, and other material information, allowing investors to make informed decisions, as opposed to merit-based regimes, where a company’s qualifications or profitability are assessed before allowing the listing.

“Singapore’s listing process will be significantly more efficient and streamlined than now and will compare favourably with leading financial hubs in the world,” MAS said, adding that regulations will now be more focused and facilitative of listings.

The first set of measures includes consolidating listing suitability and the reviewing of IPO prospectus disclosures under Singapore Exchange Regulation (SGX RegCo). 

This will provide prospective issuers with greater clarity on the listing process and timeline, as they would only need to engage with one regulator, MAS said.

Instead of taking a merit-based approach to how issuers should mitigate any risks prior to listing, SGX RegCo will focus on ensuring that the disclosure of material issues is sufficient for informed decision-making by investors.

Core disclosure requirements will be retained, with emphasis on clear disclosure of the most relevant and material information to investors. 

With this approach, MAS said that issuers will be able to expect the typical listing review process to take six to eight weeks, but with “less uncertainty”. Issuers currently undergo a review process of similar length.

The process for listed companies seeking to do a secondary listing in Singapore using disclosure documents from their primary listing will also be simplified.

SGX RegCo will adopt a “more targeted” approach to post-listing queries, alerts and trading suspensions.

It said that public queries and alerts can have “unintended and disruptive” effects on the trading of issuers’ shares and the new approach will facilitate market discipline while ensuring investor protection.

SGX RegCo will also consult the public on a proposal to remove its financial watch list.

Mainboard-listed companies that record pre-tax losses for the three most recently completed consecutive financial years, and have an average daily market capitalisation of less than S$40 million over the last six months, are placed on the list.

Listing rules state that a company on the watch list has to record consolidated pre-tax profit for the most recently completed financial year, and also needs to have an average daily market capitalisation of S$40 million or more over the preceding six months, in order to exit the watch list.

MAS and SGX RegCo will issue detailed consultations on these proposals by mid-2025.

The review group will also consider other proposals beyond the measures announced, such as strengthening investor protection and developing cross-border partnerships, MAS said. THE STRAITS TIMES/ANN