A new review group comprising 10 leaders from the public and private sectors will recommend measures to strengthen Singapore’s equities market within a year. This comes months after reports emerged that the local bourse is considering proposals to revive the stock market.
The group will be chaired by Chee Hong Tat, Minister for Transport, Second Minister for Finance and board member of the Monetary Authority of Singapore (MAS).
“A dynamic equities market is an important part of the capital formation value chain, alongside Singapore's growing private equity and venture capital ecosystem,” says MAS in its Aug 2 statement. “A deep and liquid public equities market enables companies to access capital as they expand regionally and globally.”
According to the announcement, the review group will assess the current state of the equities market and examine measures to address identified challenges. It will propose measures to promote Singapore Exchange S68 -listed companies’ development by supporting and encouraging them to build capabilities and expand internationally.
The group will also review “key elements” of Singapore’s regulatory approach to support an enabling ecosystem, including the listing regime. This includes recommending measures to attract primary and secondary listings to Singapore, to facilitate product offerings and improve liquidity on SGX as well as to broaden the pool of potential initial public offerings.
Speaking at a media doorstop at the SGX on Aug 2, Chee says the group will cover three main areas. They include a look into attracting and grooming a good pipeline of companies, creating a more vibrant and liquid marketplace, and reviewing the regulatory framework and structures that will be pro-business and pro-investors.
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Chee says: “We have been talking to different stakeholders over the past months. And I think everyone can see that there is a need for us to do something to improve the situation that we face today in Singapore, to make listings in Singapore a more attractive option for companies.”
On the three areas of focus, Chee adds that the review group will discuss how to encourage more local and foreign companies to list on the exchange. This may include tie-ups with other exchanges as well, he adds. The group will also propose ways to promote the SGX to issuers and investors.
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The review group will consist of two advisory workstreams — the enterprise and markets workstream, which is focused on studying and recommending market-supportive measures. Chaired by Lee Chuan Teck, chairman of EnterpriseSG, this workstream aims to identify and address key market challenges, opportunities and develop initiatives that can kickstart listings, enhance liquidity and revitalise the market.
The next, is the regulatory workstream that will be chaired by Chia Der Jiun, managing director of MAS. This workstream will examine enhancements to Singapore’s regulatory regime to support the “sustainable growth of the market”, while safeguarding investor confidence.
Temasek, GIC participation
When asked about the role of investment firms Temasek Holdings and GIC, Chee reiterates that both firms have a mandate to look at what will give them, as investors, the best returns.
“Because this is investing on behalf of the country and the people,” he says. “So if there are good companies, if there are good opportunities that they can invest in Singapore, GIC and Temasek are both able to do so.”
Chee continues: “But we want to look at not just one area, we want to look at a range of different measures, as I explained earlier, at how to develop a pipeline of good companies.”
Members of the review group also include Temasek Holdings CEO Dilhan Pillay; Koh Boon Hwee, chairman of SGX; MAS’s Chia; EnterpriseSG’s Lee; Png Cheong Boon, chairman of the Singapore Economic Development Board (EDB); Euleen Goh, chairman of the Singapore Institute of Management (SIM); Lai Chung Han, permanent secretary, development, Ministry of Finance; Lim Ming Yan, chairman of the Singapore Business Federation; and Neil Parekh, partner and head of Asia, Australia and New Zealand, Tikehau Capital. Parekh is the only member in the committee from the private sector.
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In explaining the composition of the committee and the minimal representation from private markets, Chee explains that there is “limited number of places”, and says that there “needs to be good representation from different stakeholder groups”.
“But please be assured that we will not only be talking to the committee members, we'll also be talking to stakeholders who may not be on the committee or who have strong interests, and who have views and ideas that you want to contribute to the review process,” he adds.
A May 6 report by Financial Times claimed SGX was reviewing proposals from the Singapore Venture & Private Capital Association, which includes GIC, Temasek, General Atlantic, Warburg Pincus and KKR.
Citing anonymous sources, FT said EDB, MAS and the Ministry of Trade and Industry were also considering the proposals.
Last month, Temasek International’s head of financial services Connie Chan said the investment firm’s mandate is to generate long-term, sustainable returns, and not to stimulate trading on the local bourse.
“The question around SGX — I think there’s a lot of news around that recently,” said Chan on July 9 in response to questions from The Edge Singapore. “What we want to emphasise is: Our mandate is to generate long-term sustainable returns; that’s the key primary focus for us.”
Speaking at the release of Temasek’s results for FY2024 ended March 31, Chan said where a portfolio company decides to list is a “multi-factor decision”. “There are going to be pros and cons, depending on which venue, but ultimately, it’s up to the companies themselves to decide.”
Chan added: “We also have 65 Equity Partners, [which] looks to invest in companies that want to list on the SGX. Therefore, that's not our primary concern. Our focus is really on delivering long-term, sustainable returns; and then ultimately, where a company decides to list will be up to the company itself.”
The group is similar to the UK’s Capital Markets Industry Taskforce (CMIT), a group established in August 2022 to help drive the reform of the UK capital markets.
Chaired by London Stock Exchange CEO Julia Hoggett, its members include GSK’s chairman, Schroders’ CEO and KPMG’s strategy head, among others. CMIT members have met monthly since July 2022, publishing their meeting minutes online.
Photo: Samuel Isaac Chua/The Edge Singapore
