Singapore fights to rejuvenate faltering stock market

Singapore is facing a challenge with its struggling stock market as it falls behind other regional exchanges, prompting discussions on potential reforms to boost its performance. The Singapore Exchange (SGX) is currently reviewing proposals from the Singapore Venture & Private Capital Association (SVCA), which includes key players such as state funds GIC and Temasek, venture firms, and buyout groups.

The government is also involved in the discussions, with the Economic Development Board, Monetary Authority of Singapore, and Ministry of Trade and Industry considering the SVCA’s suggestions. The aim is to address the trend of south-east Asian companies choosing to list in the US over Singapore, highlighting the need for reforms to make the local stock market more competitive.

Key proposals include mandating stock market participation from private capital inflows, allowing pension and sovereign funds to invest in the stock market, and fostering collaboration with other south-east Asian exchanges. These measures aim to address the low volumes and corporate disclosure issues that have plagued SGX in recent years.

While some industry insiders are optimistic about the potential reforms, others remain skeptical about whether they will be enough to reverse SGX’s downward trajectory. Previous initiatives, such as partnerships with international exchanges and the introduction of a Spac regime, have not yielded the desired results.

As Singapore grapples with the challenge of revitalizing its stock market, the government and industry players are exploring innovative solutions to attract investors and improve market liquidity. The outcome of these discussions could have significant implications for Singapore’s position as an international financial hub.