In an effort to enhance the vibrancy of Singapore’s stock market, the Monetary Authority of Singapore has established a task force to review and evaluate measures aimed at addressing market challenges. The goal is to foster listings, facilitate market revitalization, and enhance regulations to promote market growth and increase investor confidence.
The task force will also focus on identifying methods to encourage private sector participation, including capital market intermediaries, investors, and listed companies. The importance of a dynamic equities market in the capital formation value chain cannot be overstated. A liquid market not only allows companies to access capital for expansion but also enables asset owners and the investing public to participate in the growth of quality companies.
Despite the Straits Times Index showing positive trends in recent years, Singapore’s stock market has faced challenges such as thin trading volumes and more delistings than listings. This has led to the perception of the exchange as “boring” or even “zombie-like.” The turnover velocity at the SGX lags behind other exchanges such as Hong Kong and Japan, indicating lower market liquidity.
Strategies for Market Revival
Analysts suggest that lessons can be learned from successful “value up programs” in countries like Japan and South Korea to revive interest in the SGX. The review group, chaired by Chee Hong Tat and including members like Koh Boon Hwee, aims to work closely with stakeholders to implement transformative actions that will boost liquidity and listings in Singapore’s equities market.
Collaboration for Success
The SGX welcomes the establishment of the task force and is committed to collaborating with the review group to achieve its objectives. SGX RegCo, the regulatory arm of the exchange, will also play a role in increasing accountability, transparency, and market discipline. Only through a whole-of-ecosystem approach can the necessary changes be made to improve the overall performance of the equities market in Singapore.
The initiative taken by the Monetary Authority of Singapore to review and evaluate measures to enhance the city-state’s stock market is a step in the right direction. By focusing on market challenges, private sector participation, and strategies for market revival, the task force aims to improve liquidity and listings in Singapore’s equities market. Collaboration among stakeholders and regulatory bodies will be crucial in implementing the necessary changes to make Singapore’s stock market more vibrant and attractive to investors.