Singapore’s Monetary Authority established a task force to evaluate and enhance the city-state’s stock market in order to address challenges, foster listings, and boost market revitalization.
The Current State of Singapore’s Stock Market
Despite the Straits Times Index experiencing growth in recent years, Singapore’s stock market has been marred by thin trading volumes and a higher number of delistings compared to listings. This has resulted in the exchange being labeled as “boring” and “unexciting,” with low turnover velocity painting a bleak picture of market liquidity.
The newly formed review panel aims to not only improve the vibrancy of the Singapore equities market but also enhance regulations to promote growth and foster investor confidence. One of the key goals is to encourage private sector participation, including from capital market intermediaries, investors, and listed companies.
The Monetary Authority highlighted that a dynamic equities market plays a crucial role in the capital formation value chain. A liquid market allows companies to access capital for expansion while enabling asset owners and the public to participate in the growth of quality companies.
Analysts have suggested taking cues from successful “value up programs” in Japan and South Korea to revive interest in the SGX. The review group, led by prominent figures like Chee Hong Tat and Koh Boon Hwee, aims to identify transformative actions to improve liquidity and listings in Singapore’s equities market.
The Importance of Collaboration
The SGX emphasized the need for a “whole-of-ecosystem approach” to drive transformative actions in Singapore’s equities market. This collaborative effort is seen as essential to providing fresh impetus to the market and attracting more investors.
The establishment of a task force to evaluate and enhance Singapore’s equities market comes at a crucial time when the market faces challenges such as low trading volumes and delistings. By focusing on improving market vibrancy, fostering listings, and enhancing regulations, Singapore aims to position itself as a vibrant enterprise and financial hub. Collaboration between regulatory authorities, market players, and investors will be key to achieving the desired transformation in the market.
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