Posted on April 2, 2025, by Niftynews
Revitalizing the SGX is an essential goal for Singapore as it seeks to enhance its equities market and attract more investment. Although the Straits Times Index (STI) recently reached a historic high, surpassing the 4,000 mark, Singapore still faces difficulties in convincing investors to focus on local stocks. A significant reason for this is the higher returns and increased volatility of global stocks, particularly in the US market.
In an effort to stimulate growth in the local market, the Equities Market Review Group, which includes key government departments and the Monetary Authority of Singapore (MAS), has proposed four powerful measures aimed at revitalizing the SGX and strengthening its role in global financial markets. These strategies focus on improving the competitiveness of the Singapore stock market and encouraging long-term investment.
1. S$5 Billion Equity Market Development Programme (EQDP)
One of the most significant initiatives designed to boost Singapore equities market is the S$5 billion Equity Market Development Programme (EQDP). Under this program, the MAS will collaborate with fund managers who specialize in investing in Singapore-listed stocks. These investments will target a broad spectrum of companies, not just those included in the STI, thus fostering greater market diversity.
The program also includes the expansion of the Research Development Grant Scheme under the Grant for Equity Market Singapore (GEMS), which aims to increase focus on mid- and small-cap companies. This will attract more attention to these segments and create a stronger investment ecosystem in Singapore.
2. Adjustment to the Global Investor Programme (GIP)
The Global Investor Programme (GIP), which enables foreign investors to obtain Permanent Residency (PR) in Singapore through investments, is also being adjusted to further promote investments in SGX-listed equities. Currently, investors participating in the Family Office route need to establish a Single Family Office (SFO) with a minimum of S$200 million in assets under management (AUM). The new changes will narrow the investment focus to only include equities listed on approved Singapore exchanges, specifically targeting Singapore stocks to increase market liquidity.
By adjusting the GIP, the government aims to channel more foreign capital directly into the Singapore stock market, making the SGX a more attractive destination for global investors.
3. Attractive Tax Incentives to Spur Listings
To further improve the investment climate in Singapore, the government is offering tax incentives to attract new listings on the SGX. Companies making primary listings will be eligible for a 20% corporate income tax rebate, while those opting for secondary listings will receive a 10% tax rebate. These tax benefits are capped at S$6 million per year for companies with a market capitalization of at least S$1 billion.
Additionally, companies are required to remain listed for five years and commit to spending more on local business operations and creating skilled jobs. This initiative will help make SGX a more appealing place for both local and international companies to raise capital.
4. Pro-Enterprise Regulatory Stance
To foster a more investor-friendly environment, the Equities Market Review Group has also proposed a pro-enterprise regulatory stance. This includes consolidating listing suitability and prospectus disclosures under a single regulatory body, SGX RegCo, which will provide greater clarity and transparency for potential issuers.
Additionally, the listing process will be streamlined, reducing the time required for companies to get listed from months to just six to eight weeks. This simplified process will make the SGX a more efficient platform for companies looking to raise capital.
Conclusion
These four powerful measures aim to strengthen Singapore’s SGX and make it a more competitive and attractive market for investors. By offering direct investments, tax incentives, and improving the regulatory framework, the government hopes to position Singapore as a leading global financial hub. With these changes, Singapore’s SGX will become a more appealing option for investors seeking strong, stable returns in an increasingly competitive market.
