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Singapore's stock market is a vital component of the nation's enterprise financing framework, allowing companies to efficiently secure capital. Nonetheless, challenges remain, including a scarcity of high-quality new listings and low trading volumes.
Despite these challenges, Singapore possesses the ideal factors for a thriving equities market, including political stability, a robust start-up ecosystem, and a well-established fund management sector.
On 21 February 2025, the Equities Market Review Group (the Review Group) set up by the Monetary Authority of Singapore (MAS) announced its first set of measures aimed at positioning Singapore as a trusted equity fundraising venue for local and regional enterprises.
The first set of measures proposed by the Review Group focuses on three main pillars:
- Increasing investor interest (Demand)
- Improving attractiveness to quality listings (Supply)
- Pro-enterprise regulatory stance and measures to strengthen investor confidence.
Increasing investor interest (Demand)
- The Equity Market Development Programme (EQDP) will be launched with a $5bn investment to strengthen the local fund management ecosystem. The EQDP will initially invest in various funds managed by fund managers. Eligible fund strategies include those that invest into Singapore equities. This programme aims to incentivise fund managers to attract greater retail and institutional investor interest, thereby deepening trading liquidity and improving price discovery.
- Tax exemptions will be introduced for fund managers who invest substantially in Singapore-listed equities.
- Adjustments to the Global Investor Programme (GIP) will be made to support more capital inflows to Singapore's equities market.
- The Grant for Equity Market Singapore (GEMS) scheme will be expanded to include research coverage on pre-Initial Public Offering (IPO) companies and mid- and small-cap enterprises.
Improving attractiveness to quality listings (Supply)
- Tax incentives will be introduced to attract growth companies and fund managers to list in Singapore, enhancing its appeal as a listing destination (for further details, please refer to here.)
- Financing support will be provided to strengthen company growth, focusing on developing the growth-stage financing market. This includes establishing a S$1bn Private Credit Growth Fund, enhancing the Enterprise Financing Scheme (EFS) merger and acquisition and trade loan, and extending the enhanced cap for Market Readiness Assistance (MRA).
- The Government will continue to review and enhance its efforts to support local enterprise development, providing a pipeline of potential companies for listing.
Pro-enterprise regulatory stance and measures to strengthen investor confidence
The Review Group also proposes measures to streamline the regulatory framework, moving towards a more disclosure-based listing regime. This shift aims to enhance listing application efficiency and investor confidence by consolidating listing suitability and prospectus disclosure reviews under a single regulator, the Singapore Exchange (SGX) RegCo.
Key proposed measures announced include:
- The scope for merit-based judgment in new listings admission will be reduced.
- Prospectus disclosure requirements for primary and secondary listings will be streamlined to focus on core requirements.
- The listing process will become more efficient, with a commitment to complete the review process within six to eight weeks under ordinary circumstances.
- Post-listing queries, alerts, and trading suspensions will be managed with a more targeted approach to minimise unintended disruptions while maintaining investor protection.
Measures involving changes to statutory requirements and the SGX’s existing listing rules will undergo public consultation. The MAS and SGX RegCo will review the public consultation feedback, before the implementing the finalised set of measures.
The second set of measures is under further consideration and is summarised below:
- Review various trading boards of SGX, including the Catalist board.
- Strengthen investor protection by enhancing investor recourse avenues.
- Introduce incentive programmes to uplift listed companies’ shareholder engagement capabilities and sharpen their focus on shareholder value.
- Review issue manager’s due diligence requirements and guidelines.
- Improve collaborations with overseas exchanges.
- Enhance efficiency of trading and post-trade custody.
- Review the Complex Products Framework.
These efforts to push the demand and supply in the Singapore equities markets, along with the regulatory changes, are tangible elements to strengthen Singapore position as a leading equity fundraising hub. Nevertheless, the success of an IPO hinges upon issuers’ ability to articulate a clear and compelling equity story. Investors look for companies with strong fundamentals, differentiation and long-term value – companies that position themselves well will stand out. Therefore, companies who are keen explore a listing on SGX should take proactive steps to ensure they are IPO-ready.
Overall, these initiatives address some of the key questions and concerns raised in recent years by potential issuers and IPO professionals. However, the actual impact on improving the performance of the Singapore capital market will take time to materialise.
We believe that the demand related set of measures could potentially lead to improved liquidity and better price discovery, making the market more attractive for fund raising, while the supply measures will help attract potential issuers to consider listing in Singapore.
However, careful considerations should be taken in administering the proposed EQDP scheme to ensure that funds are channeled to a wider market depth rather than focusing solely on larger market capitalisation companies, such as those in the Straits Time Index (STI).
In addition, the regulator must also strike a balance between streamlining prospectus disclosure requirements and ensuring potential issuers disclose all the necessary information that are relevant for investors to make an informed investment decision.
Beyond these measures, additional efforts that could further enhance Singapore’s capital markets may include:
- Digitalising the listing process and leveraging technology for regulatory review to enhance the efficiency of the IPO process.
- Introduce sector-focused measures, such as tailored incentives to attract listing, targeting high-growth industries such as biotech, fintech and green energy.
- Strengthening partnerships with regional bourses to facilitate dual listing and attract international investors.
- Providing post-IPO support with expanded research coverage on smaller and mid-cap companies and assisting these companies with investor outreach.
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Jimmy Seet
Partner, Capital Markets and Accounting Advisory Services, PwC Singapore
Tel: +65 9833 2074
