MAS review group incentives could pull in regional biotech, fintech players: observers

MARKET watchers believe tax incentives proposed by the Monetary Authority of Singapore’s (MAS) equities market review group will appeal to regional companies across a wide range of industries, including biotech, fintech and renewable energy.

“Sectors that rely on long-term capital, high-growth equity, and sustained liquidity post-listing stand to benefit the most,” said Kelvin Lee, co-founder and CEO of investment platform Alta.

High-growth companies in the technology, healthcare and sustainability-linked industries are potential entrants as well. These firms often require long-term capital and investor confidence – qualities that Singapore’s financial ecosystem can provide, Ooi Chee Keong, Forvis Mazars Singapore partner and capital markets head, told The Business Times.

In addition, these companies could have outgrown early-stage funding but are not yet large enough for major exchanges such as Nasdaq or the Hong Kong Stock Exchange. 

They also often struggle to list in their home markets due to issues such as regulatory uncertainty, currency volatility and limited investor confidence. 

This is where Singapore can play a role. Ooi views Singapore as a “compelling launch pad for companies looking to scale beyond their domestic markets”, given that it “offers stability, credibility and access to global institutional investors”.

“Whether (they are) biotech firms seeking R&D funding, fintech startups needing institutional backing, or clean-energy players looking for ESG-focused investors, Singapore can position itself as the go-to listing hub for companies driving the future economy,” he added.

It is likely that some of these mid-sized companies are “promising regional enterprises attracted to Singapore for a variety of reasons”, said Johnny Lim, partner at law firm Reed Smith. 

He added: “Stability and neutrality are features welcomed by international investors in deploying capital towards a regional play, and other reasons may be access to a more mature financial ecosystem or fundraising in major currencies (or even dual currencies).”

Stephen Bates, partner at KPMG Singapore, noted that, for instance, companies in niche sectors such as renewable energy and biotechnology may face challenges in attracting investors in their home countries due to limited understanding or interest in these industries.“Singapore’s diverse investor base and focus on innovation and green transition could provide these companies with access to capital,” he said.

Jimmy Seet, capital markets partner at PwC Singapore, also pointed out that some firms may choose to list outside their home countries because of underdeveloped local capital markets that hinder fundraising efforts.

“Unfavourable market conditions for an initial public offering (IPO) at home can make listing in an established market like Singapore more appealing,” he added.

Real challenges are in liquidity, investor participation

The comments come after the MAS review group on Thursday (Feb 13) unveiled its first set of measures to enhance Singapore’s equities market.

The review group was set up last August and is chaired by Second Minister for Finance Chee Hong Tat, who said on Thursday: “We have been discussing with industry stakeholders and developed a set of measures aimed at helping Singapore enterprises access growth capital, and attracting quality enterprises with a regional presence to list in Singapore.”

The proposals include the introduction of tax incentives to attract enterprises and fund managers to list in Singapore. They also aim to encourage the launch and growth of funds with substantial investment in local equities.

These are targeted at mid-sized companies that may lack access to larger capital markets but could use Singapore as a launch pad for raising capital, as well as companies already listed elsewhere but are looking to secure a secondary listing in Asia.

Alta’s Lee noted that the real challenge for mid-sized companies is not just accessing capital markets, but ensuring that post-listing, there is enough liquidity, fair valuation and active investor participation to support their long-term growth. 

“To truly attract these companies, Singapore must focus on building a broader regional investor base rather than simply increasing the number of mid-sized listings,” he said.

He suggested the creation of an Asean stock-market initiative as a more effective solution. Structured as a regional exchange rather than a national one, it could pool liquidity and investor participation across multiple markets.

He explained that mid-sized Asean companies have historically faced roadblocks in listing, limited liquidity, a smaller institutional investor base, and lower valuations compared with global peers. 

“Compelling equity story”

PwC’s Seet echoed these sentiments. He noted that companies without a presence in major capital markets often struggle to raise funds due to unfamiliarity among investors. 

Potential issuers, he said, will “need to articulate a clear and compelling equity story, backed by (sound financials), to attract potential investors”.

Paul Chew, head of research at Phillip Securities Research, noted that small- and mid-cap companies in Singapore already face challenges in accessing capital. He cited the thin liquidity and limited IPOs or secondary listings on the Singapore Exchange. 

“Ironically, capital sourced locally may be more readily available overseas, as seen in the listing of some Singapore-based companies overseas, such as Grab, Sea, and Razer,” he said.

However, tax incentives form only the first set of proposals from the MAS review group. It will continue to work on the next set of measures to foster the longer-term development and sustainable growth of Singapore’s equities market, which will be presented in the second half of 2025.