The Monetary Authority of Singapore recently established a task force aimed at bolstering the city-state’s stock market. The review group’s primary goal is to evaluate measures to enhance the vibrancy of the Singapore equities market. This initiative is essential for addressing market challenges, fostering listings, and facilitating market revitalization. Additionally, the MAS aims to enhance regulations to facilitate market growth and foster investor confidence.
The MAS emphasized the significance of a dynamic equities market in the capital formation value chain. A liquid market not only enables companies to access capital for expansion but also allows asset owners and the investing public to participate in the growth of quality companies. Improving the attractiveness of Singapore’s equities market can enhance its standing as a vibrant enterprise and financial hub, complementing Singapore’s innovation and start-up ecosystem, private markets, as well as asset and wealth management sectors.
The Challenges Faced by Singapore’s Stock Market
Despite the Straits Times Index’s positive performance in recent years, Singapore’s stock market has faced challenges such as thin trading volumes and more delistings than listings. This situation has led to observers describing the exchange as “boring” and “unexciting,” with some even referring to it as a “zombie” bourse. The turnover velocity at the SGX, a measure of market liquidity, is considerably lower compared to other exchanges in the region, such as Hong Kong and Japan.
Analysts have suggested various strategies to revive interest in the SGX, including learning from successful “value up programs” in Japan and South Korea. The review group, chaired by Chee Hong Tat, Singapore’s second minister of finance, will play a crucial role in identifying methods for encouraging private sector participation. Collaboration with key stakeholders such as capital market intermediaries, investors, and listed companies will be essential in implementing transformative actions to improve liquidity and listings in Singapore’s equities market.
The establishment of the task force by the MAS signals a proactive approach to addressing the challenges faced by Singapore’s stock market. By focusing on enhancing market vibrancy, fostering listings, and facilitating market growth, Singapore aims to strengthen its position as a leading financial hub in the region. Through collaboration and innovative strategies, the review group aims to revitalize the Singapore equities market and attract greater investor interest.
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