Quoteworthy: "Smart investors see that the product is scaling and that there is a clear monetisable opportunity there even before the revenue materialises." –— Meta Platforms CEO Mark Zuckerberg, after the company spent billions more than expected on AI, sending the stock down 19% on April 24
Singapore inflation cools in March as MAS retains 2024 forecast
In March, Singapore’s core inflation eased on lower food prices and cost of services, with the disinflationary trend expected to continue, barring any supply shocks from geopolitical tensions.
Official data showed on April 23 that gains in the core measure, excluding housing and private transportation costs, slowed to 3.1% last month from a year ago. That was lower than the median 3.5% expected in a Bloomberg survey of economists and compared with a seven-month high of 3.6% in February. Headline inflation slowed to 2.7% from 3.4% in February. That was the lowest in 30 months compared with a median of 3.1% in the Bloomberg survey.
The March readings provide a reprieve to the Monetary Authority of Singapore (MAS), which elected to extend its policy pause earlier this month amid expectations for inflation to step down by the fourth quarter and momentum to build in the trade-reliant economy. The authority will review the policy next in July.
MAS and the Ministry of Trade and Industry (MTI) retained their forecasts for core and all-items inflation to average 2.5% to 3.5% this year. That outlook faces risks from geopolitical shocks and adverse weather events, which could put upward pressure on global energy and food commodity prices and shipping costs, MAS and the MTI said in a joint statement released on April 23.
The central bank, which uses the exchange rate instead of interest rates to stabilise prices, has kept the local dollar on an appreciating path to blunt imported inflation. However, it needs to ensure that the Singapore dollar does not appreciate to a level that starts hurting exports. — Bloomberg
SGX RegCo launches public consultation to streamline shareholder-requisitioned general meetings
The Singapore Exchange S68 Regulation (SGX RegCo) is proposing a rule change mandating listed issuers to aid shareholders in requisitioning general meetings for prompt convening. Issuers must initiate facilitative efforts within 21 days of depositing the requisition notice. Simultaneously, those disputing the notice’s validity must seek a court ruling within the same timeline.
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SGX RegCo suggests that issuers assist requisitionists by releasing announcements and documents, such as notices, circulars, and proxy forms, on SGXNet; sending these documents to shareholders; collecting proxy forms at the issuer’s office; ensuring the board’s presence at the meeting; enabling the scrutineer to perform their duties; and instructing agents, like the share registrar and company secretary, to provide necessary assistance, such as preparing mailing labels and attending the meeting.
Companies have two months to hold general meetings, including extraordinary general meetings from the day the board receives the requisition notice. This includes the 21-day notice from the date the circular is distributed to shareholders to the date of the EGM.
The current regulation stipulates that the requisition notice must meet the procedural requirements of the Companies Act 1967 of Singapore, including that requisitionists must hold at least 10% of the total number of paid-up shares.
To facilitate the board’s assessment of the requisition notice’s validity, it should minimally encompass the requisitionists’ names and shareholdings and describe the resolutions proposed to be tabled at the shareholder-requisitioned meeting.
When the board receives a requisition notice, it should inform shareholders via SGXNet immediately. Any subsequent material developments, including any application filed to court, should be immediately announced.
Proposals to facilitate shareholders to requisition general meetings are part of SGX RegCo’s efforts to institute a “value focus” approach. “I wish to emphasise that it takes the entire market community to improve the situation. We can have simultaneous efforts to enhance shareholder value, investor interest, liquidity, and valuations, acting in mutually reinforcing ways to benefit our market and participants,” says Tan Boon Gin at a recent media briefing.
Other initiatives for the value focus approach include recently introduced governance rules. The RegCo has introduced a nine-year limit on independent directors’ tenure to promote board independence and encourage board renewal. “New directors will bring new ideas and be less wedded to legacy businesses,” Tan adds. “We have also sought to increase the transparency of the link between pay and long-term value creation by enhancing remuneration disclosures of the board and CEO.”
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The Securities Investors Association (Singapore) (SIAS) has recently indicated that they are studying the possibility of posing additional questions to boards of undervalued companies regarding their plans to improve their valuations. “We support this initiative and encourage companies to respond meaningfully and comprehensively to such questions,” Tan says.
SGX RegCo aims to decrease market friction by reducing trading queries, particularly for small-cap stocks with unusual activity.
Tan adds: “We have launched a review of the queries posed to listed companies to explore how we can issue such queries to create less noise for the market while ensuring material information remains available to investors. This is in addition to the steps we have already taken to fine-tune our queries regarding unusual trading activity to make them more targeted. This has led to a fall in the number of such queries issued in the last half-year.” SGX RegCo is also considering initiatives like facilitating shareholder meetings, with more proposals expected in the coming months. — Goola Warden
Funding for early-stage tech start-ups in Singapore grew 59% last year: SGInnovate
In 2023, funding for Singapore’s early-stage emerging tech start-ups surged, reaching US$402 million ($548 million), marking a 59% y-o-y increase, as reported by SGInnovate. However, the number of newly incorporated emerging tech start-ups decreased to 25 in 2023, down from 35 in 2022.
More 2023 incorporations yet to be disclosed may push the final figure up, but it is still likely to dip compared to 2022, reflecting ongoing economic uncertainties that could potentially delay incorporations.
Advanced manufacturing is among the verticals that have seen incorporations drop steadily since 2020. Despite a consistent output of high-quality research in this area, those start-ups face ongoing challenges such as commercialisation and the availability of specialised talent.
Alternatively, start-ups in the agrifood and sustainability verticals performed strongly in terms of funding and incorporations. Funding events have grown year-on-year for both sectors, with agri-food start-ups securing 13 deals in 2023 (eight in 2022) and sustainability start-ups closing 16 deals in 2023 (12 in 2022).
Sustainability is the only vertical to see a y-o-y increase in funding events and amounts since 2021. This sector was the most active in the number of start-ups incorporated last year, while average seed round sizes have also grown by nearly four times between 2022 and 2023.
The agri-food sector recorded seven undisclosed funding rounds, suggesting that the total raised in 2023 might exceed US$9.92 million.
Despite a y-o-y decrease in incorporations, longer-term data shows a consistent emergence of new companies in the agri-food industry. Of the 80 start-ups formed in the last five years, 39% are engaged in alternative proteins or related enabling technologies, showcasing the dynamism of Singapore’s alternative foods sector.
SGInnovate’s Singapore Early-Stage Emerging Tech Startups 2023 report also examined trends in start-up visibility and strike-offs to offer a comprehensive overview of each domain’s progress and the life cycles of its start-ups.
The report also revealed that it may take up to three years to identify the majority of emerging tech start-ups incorporated in a given year, indicating a higher level of ecosystem activity than previously known. For example, the updated data in the current report identifies 93 emerging tech start-up incorporations in 2021.
This prolonged discovery period may be attributed to various factors, such as founders’ preference to increase company visibility only after raising their first institutional funding round or completing the development of their minimum viable product. — Nurdianah Md Nur
