Singapore Launches S$5 Billion Programme to Revitalize Stock Market
In a bid to rejuvenate Singapore’s stock market, the Monetary Authority of Singapore (MAS) has unveiled a groundbreaking S$5 billion programme. This initiative involves allocating funds to dedicated fund managers with a strategic focus on investing in Singapore stocks, aiming to inject liquidity and attract a new wave of investors to the market.
MAS’s plan entails an active management approach, where fund managers will diversify investments across a spectrum of companies, thereby enticing additional investments from a broader investor base. This bold move comes in response to the lackluster valuations, limited liquidity, and dearth of new listings that have plagued Singapore’s stock market in recent years.
The genesis of this ambitious programme can be traced back to the formation of a review group in August 2024, tasked with fortifying Singapore’s stock market. The group’s proposals, which have been sanctioned by Prime Minister and Finance Minister Lawrence Wong, encompass a multi-faceted strategy to invigorate the market and stimulate investor interest.
Evaluating Eligible Fund Managers and Strategies
According to MAS Managing Director Chia Der Jiun, the initial phase of the programme will involve a rigorous evaluation process to identify qualified fund managers and viable investment strategies. This meticulous selection process is slated to unfold over the coming months, underscoring MAS’s commitment to ensuring the programme’s success and efficacy.
In alignment with MAS’s overarching goals, Second Minister for Finance Chee Hong Tat emphasized the authorities’ openness to investing through both established and emerging funds. By fostering a conducive environment for fund managers to flourish, Singapore aims to bolster its fund management industry, with a particular emphasis on local equities to stimulate trading activity.
Tax Incentives and Market Enhancements
In a bid to further incentivize companies and fund managers to list in Singapore, Finance Minister Wong announced a series of tax incentives during his Budget 2025 speech. These incentives include a 20% corporate income tax rebate for Singapore-based companies seeking a primary listing, coupled with a 10% rebate for those pursuing a secondary listing with share issuance on approved Singapore exchanges.
Moreover, fund managers investing significantly in Singapore-listed equities will enjoy a reduced tax rate of 5% on qualifying income, contingent on maintaining a primary listing in Singapore for a stipulated period. These tax concessions are poised to galvanize capital inflows into Singapore’s equity market, thereby bolstering the overall vibrancy and attractiveness of the local capital markets.
Streamlining Regulations and Enhancing Investor Protection
In a bid to streamline listing processes and alleviate regulatory burdens, Singapore is contemplating regulatory adjustments to foster a more conducive environment for companies seeking to list on the SGX. Proposed measures include simplifying listing procedures, reducing prescriptive requirements, and refining the merit-based judgment process for new listings.
Noteworthy proposals include eliminating the financial “Watch-List” and transitioning away from regulatory surveillance, alongside automating the expiration of Trade With Caution alerts to prevent unintended negative repercussions. These regulatory enhancements, coupled with market structure adjustments, aim to attract retail liquidity, fortify investor protection, and elevate Singapore’s standing as a premier listing destination.
In conclusion, the unveiling of the S$5 billion programme marks a pivotal moment in Singapore’s financial landscape, heralding a new era of innovation, revitalization, and growth. By embracing a comprehensive strategy encompassing fund management, tax incentives, and regulatory reforms, Singapore is poised to reinvigorate its stock market, attract quality companies, and nurture a vibrant ecosystem conducive to sustainable growth and prosperity.
This comprehensive overhaul, spearheaded by MAS and endorsed by key stakeholders, underscores Singapore’s unwavering commitment to fostering a dynamic and resilient financial ecosystem, poised for sustained success and prosperity in the years to come.
