SINGAPORE: Singapore’s efforts to revitalise its stock exchange have drawn some public scepticism.
The Equities Market Review Group, led by Second Minister for Finance Chee Hong Tat, was set up to address concerns that the Singapore Stock Exchange is “not attractive enough,” as Finance Minister and Prime Minister Lawrence Wong stated in his Budget 2025 speech.
However, the group’s efforts have failed to win over critics.
On Feb 15, former Foreword Communications managing director Gerard Ong, in his Facebook post, criticised the government’s measures, calling them a “damp squib.”
Mr Ong wrote, “Sorry Mr Chee, everyone knows you have already rejected the idea of Singapore’s sovereign funds investing in the Singapore Exchange (SGX). So it is not surprising investors were not impressed with your initial proposal to revive the equities market. Even market watchers and those who invest in the bourse know that tax incentives will not address the fundamental issues facing the Singapore market.”
He pointed out that this was evident when SGX shares fell by S$0.78 to S$12.90 on the day of the announcement. Additionally, Citi Research downgraded the stock to a “sell” rating and lowered its price target to S$11.90, as reported by The Business Times.
Mr Ong added, “Looks like all these measures to entice investors to invest in Singapore equities are likely to go nowhere after all the hullabaloo. I guess one cannot blame you, Mr Chee. After all, you, being a lifelong civil servant, will never understand the pulse and problems confronting the local equity traders and investors.”
Commenters expressed the same scepticism, with one stating, “This exercise is putting the cart before the horse…How is attracting random companies to list here beneficial?”
Earlier this month, Singapore retail traders were reportedly ditching local stocks to invest in US stocks for better returns—a trend becoming more common among Singapore traders, according to Bloomberg.
Tiger Brokers reported that trading in local stocks fell by over 11 percentage points in the past four years, while trading in US stocks rose, with buzzy firms like Nvidia and Tesla drawing investors.
Singapore’s market has struggled with low liquidity, reliance on sectors like banking and real estate investment trusts, and fewer new listings. These contributed to a drop in trading volume for the Straits Times Index, reaching a five-year low.
While Singapore’s market saw some success, with the Straits Times Index rising 17 per cent last year to a record high in January—thanks to local banks and renewed interest from retail and institutional investors—FSMOne data showed that 43 per cent of client investments went into US markets last year, up from 29 per cent in 2019.
Meanwhile, investments in Singapore stocks dropped from 60 per cent in 2019 to 49 per cent in 2024.
To tackle these issues and draw investors back, Singapore authorities announced last year that they were preparing “bold changes” to the market’s regulatory structures.
The Equities Market Review Group, chaired by Mr Chee, was set up in August last year and proposed tax incentives to boost investor confidence and attract more listings in Singapore. These included incentives for Singapore-based companies and Singapore-listed fund managers who plan to expand their business in the city-state.
However, these measures have yet to convince sceptics.
On Feb 15, opposition politician and lawyer Lim Tean reacted to Mr Ong’s post, stating how “even the public have no confidence” in Mr Chee.
His post read: “What a joke! Asking a career civil servant to lead a review to revive our moribund stock exchange! Even the public have no confidence in CHT as Transport Minister and want him to resign! What makes the PAP think that CHT can revive the Singapore bourse with his team?”
While Mr Ong and Mr Lim’s comments echo some public concerns, the debate continues: Will the government’s proposed measures be enough to revitalise Singapore’s equities market? /TISG