BT Mark to Market: How MAS plans to spark market magic

IN OCTOBER 2024, the Singapore market is buzzing with discussions around revitalising the local equity landscape. With the Monetary Authority of Singapore (MAS) announcing the establishment of a review group aimed at strengthening the local equities market, stakeholders are curious about the potential changes on the horizon. As the landscape evolves, it is essential to analyse the proposed measures and their implications for investors and companies alike.

Join senior correspondent Ben Paul as he dives into this issue. This is Mark to Market, a podcast of BT Correspondents that aims to provide analysis and insight on market trends and corporate issues in Singapore.

Background

The MAS Review Group was formed in response to the underperformance of the Singapore market and the declining number of listed companies. This issue has been a recurring theme in discussions surrounding Singapore’s position as a global financial hub.

The government has previously implemented measures such as grants for listing costs and the establishment of funds to support promising companies. However, the recent shift towards considering more innovative policies reflects a growing recognition of the need for substantial change.

Second Minister for Finance Chee Hong Tat, who chairs the review group, acknowledges that revitalising the market will not be an easy task. The group is focusing on three key areas: encouraging a pipeline of quality listings, enhancing investor participation, and broadening market liquidity. These areas align with the long-standing challenges faced by the local market.

Bridging the gap: supply and demand

One critical aspect that the MAS Review Group must address is the balance between supply and demand in the local market. The success of the stock market hinges on attracting both domestic and foreign institutional investors. SGX chairman Koh Boon Hwee emphasises the importance of fostering a robust institutional asset management ecosystem that includes the local stock market. Without domestic institutional demand, attracting foreign interest will be challenging.

Motivating listed companies

To enhance the overall market environment, it is essential to motivate existing listed companies to maximise their market valuations. Unlike Singapore’s thriving Reit market, where home-grown sponsors have a vested interest in maintaining healthy valuations, many publicly listed companies lack similar incentives. Implementing measures that encourage companies to actively engage with investors and improve their market presence is crucial for revitalisation.

The MAS Review Group’s efforts to revitalise Singapore’s equity market are commendable, but success will depend on the effective alignment of interests among various stakeholders. By focusing on quality listings, enhancing investor participation, and reducing regulatory burdens, the group can create a more vibrant market.

Look out for more Mark to Market episodes in BT Correspondents.

If you have any thoughts or questions about the show, email us at btpodcasts@sph.com.sg

More from Ben:

Take calculated risks to revive local market

MAS review group should build on market’s track record, seek to strengthen big local companies

MAS review group needs to bring stakeholders together, and find a way to realign their interests