Tackle the decline in the local stock market

IN RECENT years, unflattering terms like “zombie’’, “in a death spiral’’ and “incredibly shrinking’’ have been used to describe the Singapore stock market.

Commentators who have used these terms point to persistently low liquidity, poor valuations and the fact that the number of companies departing the Singapore Exchange (SGX) through privatisation and delisting far exceed those going public through initial public offers (IPOs). Asked for reasons, the reply is invariably the same – a lack of confidence among investors in a large portion of the market.

Just over five years ago, SGX had a market capitalisation of S$1.1 trillion with 752 companies listed as at end-November 2017; today the market cap has fallen to S$815 billion with only 630 listed entities as at the end of April.