Singapore sets up task force to boost flagging stock market
By John Cheng and Suvashree Ghosh
(Bloomberg) – Singapore has established a task force to revive its sagging stock market amid calls to tackle poor liquidity and a dearth of new listings, a tacit admission by authorities of the ongoing troubles.
A group chaired by second minister for finance Chee Hong Tat will recommend measures to strengthen the country’s equities market development, the Monetary Authority of Singapore said on Friday. It will consider “initiatives to improve the vibrancy” of the stock market, and study ways “to galvanise greater private sector participation” in the effort, the financial regulator said.
The group, whose members include representatives from the MAS, state investment firm Temasek Holdings, Singapore Exchange and other public and private sector participants, will complete their report within 12 months.
While Singapore has emerged as one of Asia’s top financial hubs and is one of the world’s most expensive cities, its stock market has been plagued by tepid trading volumes and has shrunk over time. Delistings from the Singapore Exchange have frequently outnumbered new debuts, and its total stock market capitalisation has dropped to around S$800 billion ($599 billion) from about S$1.1 trillion in 2018.
Fast-growing technology companies headquartered in Singapore, such as Grab Holdings and Sea, have chosen to list in the US, while established domestic companies including massage chair maker OSIM International and warehouse operator GLP delisted from the local exchange. The Singapore Exchange has only had one new listing so far this year after the number of IPOs dwindled in 2023, lagging regional peers, data compiled by Bloomberg shows.
“I think everyone can see there is a need for us to do something to improve the situation that we face today in Singapore, to make the listing in Singapore a more attractive option for companies,” Chee told reporters on Friday. He said that would include homegrown startups as well as companies from other countries.
The government and the stock exchange have been reviewing proposals from industry groups that could help boost stock trading, including channeling more pension and sovereign money, as well as private capital, into Singapore equities.
The task force will consider regulatory approaches, measures to attract primary and secondary listings to Singapore, and ways to improve trading liquidity. Chee said the group would look at how the country can “attract and groom a good pipeline of companies” that could be encouraged to list on the local market.
The latest steps come after Asian bourses including Japan, South Korea and China in recent years have rolled out initiatives to boost stock valuations and improve corporate governance.
The Southeast Asian country’s central bank last year tweaked tax incentives for single family offices to improve investment in local equities, while Temasek opened a fund in 2021 to bolster the stock market. Temasek is also a large shareholder of many of Singapore’s largest listed companies, including Singapore Airlines, DBS Group Holdings, Sembcorp Industries and others.
While the Straits Times Index has climbed more than 4% this year thanks to a rally in bank shares, more than half of the companies listed in Singapore are trading below their book values, according to data compiled by Bloomberg.
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