The Monetary Authority of Singapore (MAS) is conducting a review of the country’s equity market in a move to revive it amid global challenges, a top executive said.
Transport Minister and Second Finance Minister Chee Hong Tat, who chairs the MAS review group, announced this initiative at the Securities Investors Association Singapore’s (SIAS) 25th anniversary event and launch of the Corporate Governance Conference 2024 on Monday.
Chee emphasised that while success is not guaranteed, especially given global market headwinds and increasing competition, taking calculated risks offers a chance to turn things around for the local bourse. The review group has developed ideas through engagement with industry stakeholders and is prepared to implement measures in phases after assessing relevant risks.
“[..] We are prepared to make changes and try new ideas. Because if we don’t try, our chances of success are zero. If we take some calculated risks and try, it is not a guarantee we will succeed, but we have a chance to turn things around,” he stated while echoing Pope Francis’s advice to young Singaporeans about leaving their comfort zones.
The minister highlighted the country’s success in becoming the largest hub for real estate investment trusts (REITs) in Asia, excluding Japan. He suggested that Singapore could position itself as a trusted venue for mid-sized regional companies, offering them better visibility than they might find in larger global markets.
MAS said the review group is focusing on leveraging Singapore’s strengths and unique value proposition to both investors and companies seeking listings.
The group focuses on three main areas. First, encouraging a pipeline of quality companies for listing, aims to attract both local and regional growth companies, particularly in fintech, innovation, and sustainability sectors.
Second, enhancing investor participation and broadening market liquidity to recognise the concentration of liquidity in a small number of stocks. The review group is exploring ways to broaden market participation.
Third, re-evaluating regulatory structures and approaches. The government plans to streamline regulations where appropriate, including simplifying prospectus requirements for IPOs and secondary listings. However, Chee emphasised that this would be done while maintaining necessary investor protections.
The government is considering incentives to encourage the markets. The review group is actively seeking input from various parties, including startups, enterprises, banks, fund managers, and investors.
He said the implementation of changes will be carried out in phases, without waiting until the end of the 12-month review period. This approach allows for quicker action on feasible ideas while allowing more time for complex proposals.
Chee acknowledged SIAS’s crucial role in investor education and advocacy over the past 25 years. He hopes for SIAS’s continued involvement in bridging gaps between investors, regulators, and industry players as Singapore works to grow its equities market and financial sector.
He concluded the speech with hopes that with this bold initiative to revitalise its equity market, the financial world will be watching closely. The success of these measures could potentially reshape Singapore’s position in the global financial landscape and offer new opportunities for both local and regional companies seeking capital for growth.
