Singapore unveiled on Friday a series of initiatives to revitalize its equities market, including a 20% tax break for main listings and a S$5 billion ($3.74 billion) program aimed at investing in indigenous businesses.
The announcement goes into further depth on the steps outlined by Singapore’s equities market review committee on February 13 to revitalize the country’s stock market, which has been under pressure due to a lack of major listings and weaker trading liquidity. “We aim to have these measures lay the foundations for a sustainable and well-functioning equities market, and we think if we take each of them together, they may have an impact,” Singapore’s second finance minister Chee Hong Tat said in an announcement on Friday.
According to a statement from the review committee, MAS and the Financial Sector Development Fund will start the S$5 billion Equity Market Development Program, which will gradually attract investments from additional investors. MAS will begin examining qualifying fund managers and program plans in the coming months. They should be actively managed and invest in a diverse variety of Singaporean firms, rather than only index components.
Other steps include limiting the qualifying investment categories for new family office applicants under the Global Investor Program to stocks traded on Singapore exchanges. Single family offices are one-stop shops that handle the money of the extremely rich. To encourage listings, the review committee announced measures such as a 20% corporate income tax credit for new primary listings and a 10% tax rebate for new secondary listings with share issuance.
According to LSEG statistics, the total proceeds generated by Singaporean IPOs were $152.3 million last year, 37.7% more than $110.6 million in 2023, but still just 4.6% of Southeast Asia’s total market share. Nonetheless, the outlook is improving, with a slew of companies potentially looking to go public in the country, including Singaporean private healthcare group Foundation Healthcare Holdings and Nippon Telegraph & Telephone Corp’s (9432.T) data center real estate investment trust. Singapore’s measures to revitalize the domestic stock market, along with factors such as low valuations and good dividend yields, prompted analysts at JPMorgan (JPM.N) to raise Singapore shares to “overweight” on Wednesday.
