In May, MAS and SGX RegCo unveiled reforms lowering listing barriers due to declining IPOs. Singapore’s restrictive criteria and rising regional competition prompted a S$5 billion Equity Market Development Program.
The program aims to enhance market liquidity, attract high-growth companies, and foster a more dynamic capital market. By easing listing requirements and providing financial incentives, Singapore seeks to position itself as a competitive hub for IPOs amidst intensifying regional competition. These reforms are expected to stimulate investor interest and support the growth of local enterprises.
Reform Initiatives
In May, the Monetary Authority of Singapore (MAS) and Singapore Exchange Regulation (SGX RegCo) introduced significant reforms to reduce barriers for listing on the Singapore Exchange (SGX). These changes are a response to a decline in initial public offerings (IPOs), with just four listings completed in 2024, all excluding the Mainboard, raising only US$31 million.
Challenges in Singapore’s IPO Market
Over the past decade, Singapore’s IPO market has significantly contracted. By October 2024, SGX had only 617 listed companies, the lowest since 2004, down from a peak of 782 in 2013. The city-state’s stringent admission criteria, like a S$30 million cumulative profit threshold, have hindered startups and firms focused on reinvestment from accessing the Mainboard.
Regional Competition and New Incentives
Regional exchanges have become more competitive, with Malaysia recording 46 IPOs in 2024, raising US$1.5 billion. In contrast, SGX captured less than 2% of Southeast Asia’s 122 IPOs last year. Many companies prefer Hong Kong, Australia, or the U.S. for better investor pools. To counter this, Singapore has launched a S$5 billion Equity Market Development Program, investing in SGX equities to boost liquidity and market activity.
| This article was first published by ASEAN Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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