MAS offers up to $75 mil in grants to stoke local equity interest and talent development of analysts
SINGAPORE (Jan 14): The Monetary Authority of Singapore is launching a $75 million package of incentives to help revive growth in the Singapore stock market, which has been suffering from declining trading interest.
Called Growth for Equity Market Singapore or GEMS, it is a three-year plan with three key planks: They are to make it cheaper for companies to list; provide grants to help defray part of the salaries of research analysts, and offer funds to support the growth of the equity research ecosystem.
GEMS will take effect on Feb 14 this year.
Under GEM's first component of listing grants, companies in new technology sector and minimum market value of $300 million will enjoy 70% co-funding of listing expenses, capped at $1 million.
Companies from high growth sectors, with the same minimum market value of $300 million, will enjoy 20% co-funding and subject to a cap of $500,000. These companies include those from sectors such as advanced manufacturing, hub services, logistics, urban solutions and infrastructure, as well as healthcare.
In addition, all other listings can enjoy a co-funding of 20%, with a cap of $200,000.
Small to medium-sized listings cost between $1 million to $2 million.
Recognising the importance of equity research in generating trading interest, GEMS will include a component to fund 70% of the salaries for entry-level equity research local analysts. For experienced analysts with more than five years’ experience that are hired into new positions, they will enjoy a salary subsidy of 50%.
Last but not least, MAS will allocate funds to crowd-sourced ideas and initiatives to propel the development of equity research systems. Such initiatives might include publication of industry or sector primers, innovative ways to distribute research.
Last year, the total quantum of capital raised via initial public offerings in the Singapore stock market was barely $700 million, down from $4.7 billion in 2017.
While industry players have hinted that the pipeline of new IPOs this year is healthy, more can be done.
In a sense, SGX and MAS are adopting different approaches in hope of reaching the same objective. Over the years, there have been various research schemes, including those paid for by the listed companies themselves.
