Singapore has all the “levers” in place for sustainable stock market growth, according to Serene Cai, head of securities at the local stock exchange, which is preparing to launch a new board for dual listing with the technology-heavy Nasdaq bourse in the US.
She was referring to a series of government measures rolled out last year to create market demand and improve liquidity. Central to this is the Monetary Authority of Singapore’s S$6.5 billion (US$5.09 billion) equity market development programme, in which asset managers are selected to deploy funds into Singapore stocks with the aim of improving trading liquidity, and spurring broader institutional and retail participation.
Thus far, nine asset managers have been given mandates totalling S$3.95 billion from the programme.
Data from the Singapore Exchange (SGX) indicate the measures are having an impact. Last year, retail investors bought a net S$2.6 billion of stocks, the most since 2020.
The bourse also plans to cut the board lot size– the minimum number of shares to buy or sell in a single transaction – from 100 shares to ten for shares priced at a minimum S$10 to make blue chips more affordable for retail investors. This is expected to take effect around the middle of this year.
“A lot of what we are thinking of doing is really about all the levers that are coming together right now, [which] are meant to activate the whole ecosystem,” Cai says in an interview with Asia Asset Management.
“The current robustness of market gives us a good base to kind of work on. This is why some of the different initiatives that have been announced is ready for us to be able to build a structurally stronger stock market” with “a bit more of a sustainable momentum and liquidity where capital formation, liquidity, and participation all come together”.
Mid-year launch
The SGX’s Global Listing Board (GLB), established in partnership with Nasdaq, is scheduled to launch in the middle of this year. It is aimed at attracting high-growth, new economy, large-capitalisation firms to list on both bourses.
Companies with a market cap of at least S$2 billion and global ambitions with strong links to Asia have to only submit a single set of paperwork for regulatory approval on the two bourses.
The market cap requirement is far higher than the threshold for regular SGX listing, which is currently set at either S$150 million for profitable firms, or S$300 million for firms that seek to go public by relying on pre-profit metrics.
Cai says the SGX is on track for the GLB’s launch. Amendments to the Securities Financial Act topave the way for a regulatory framework for dual listing on the GLB and Nasdaqare now wending their way through parliament.
