The Monetary Authority of Singapore (MAS) has set up a special task force consisting of top executives from the public and private sectors to revive the local equities market.
The initiative – dubbed as “review group” – will consider steps to improve the vibrancy of the Singapore stock market and ways to engage private sector participation from capital market intermediaries, investors, and listed companies, according to a MAS statement on Friday.
“A dynamic equities market is an important part of the capital formation value chain, alongside Singapore’s growing private equity and venture capital ecosystem. A deep and liquid public equities market enables companies to access capital as they expand regionally and globally,” MAS said in the statement.
The group includes Temasek chief executive Dilhan Pillay; Singapore Institute of Management chairman Euleen Goh; SGX chairman Boon Hwee Koh; permanent secretary (development) of Ministry of Finance Chung Han Lai; Singapore Business Federation chairman Ming Yan Lim; Tikehau Capital partner and head of Asia, Australia and New Zealand Neil Parekh; and Singapore Economic Development Board chairman Cheong Boon Png.
The group will recommend measures to attract primary and secondary listings to Singapore. It will also look at steps to boost product offerings and improve liquidity in the city-state’s equity market to broaden the pool of initial public offerings. The scope of the group also extends to suggest ways to enable SGX-listed companies to build capabilities and expand internationally. The group is expected to submit its report within 12 months.
Chaired by Second Minister for Finance and MAS board member Chee Hong Tat, the group comprises two advisory subunits.
Led by EnterpriseSG’s chairman Chuan Teck Lee, a group of representatives from relevant government agencies and the private sector in ‘The Enterprise and Markets Workstream’ will address market challenges, and opportunities and develop initiatives that can kickstart listings.
‘The Regulatory Workstream’, chaired by MAS’ managing director Der Jiun Chia, will examine enhancements to the Singapore regulatory regime and foster investor confidence.
The MAS-led group will build on the government’s past works to support enterprise financing and the public markets, including setting up growth-stage funds, introducing corporate structures and share classes to facilitate such listings, and measures to improve research coverage.
The MAS initiative came months after the Singapore Stock Exchange received a submission from The Singapore Venture & Private Capital Association (SVCA) in April to consider making a move to make the local initial public offering a viable exit option for shareholders of mid-sized companies, according to a document seen by DealStreetAsia.
Private equity players with Southeast Asian portfolio companies have grappled with the worst year to make money and hand back cash to their limited partners (LPs) as exit leeways narrowed in the high-rate market conditions in 2023.
The region last year recorded the most depressed exit environment since 2017 with deal value diving as much as 60% to $2.8 billion from the previous year, a far cry from the time when investors were paying for nosebleed valuations for star unicorns like Grab in 2021. Exit count fell 70% from 21 deals in 2022 to six in 2023, according to a recent Bain & Company report.
While Singapore remained a hotspot for sponsor-linked deal-making activities in the region last year, local public companies continued to be taken private instead of making a public debut.
In May, Southern Capital made a privatisation offer for Japanese F&B group RE&S from Singapore’s mainboard. Dymon Asia Private Equity also made a similar move for Amara Holdings, one of the city-state’s oldest hotel groups last November.
However, local companies that were taken private rarely made a comeback to the local stock markets over the years.
DealStreetAsia reported that Investcorp-backed Viz Branz, which was delisted in 2013 is back in the M&A market after the 2017 relisting plan in Singapore did not materialise. An auto parts business unit of Northstar’s Innovalues is also in talks with investors in the sale process after the take-private deal was completed in 2017.
Eu Yan Sang, which was taken private by a consortium involving Tower Capital in 2016, was jointly acquired by Japanese firms Rohto Pharmaceutical and Mitsui & Co in one of the most high-profile transactions this year.
