Singapore — The Monetary Authority of Singapore (MAS) has launched a new review committee aimed at rejuvenating the city-state’s stock market.
Announced on Friday, the MAS said the panel will focus on improving market vitality by addressing current challenges, promoting listings and revitalizing market activity. The initiative also aims to improve regulations to promote market growth and boost investor confidence.
One of the main objectives of the panel is to encourage greater participation by the private sector, including capital market intermediaries, investors and listed companies.
“A vibrant equity market is a crucial component of the capital formation value chain,” MAS stressed. A liquid market not only helps companies raise capital as they grow, but also allows asset owners and the public to invest in high-quality companies.
“Increasing the attractiveness of Singapore's stock market can strengthen the city's status as a dynamic financial and business hub,” MAS said, adding that this effort will also support Singapore's innovation and start-up ecosystems, private markets, and wealth and asset management sectors.
Despite the Straits Times Index posting gains in three of the past four years, including 2024, Singapore's stock market has struggled with low trading volumes and a higher number of delistings than new listings. This has led some to describe the exchange as “boring” and “unexciting,” with one observer even calling it a “zombie” stock market in 2021.
For the full year 2023, the SGX's turnover rate, a measure of market liquidity, was 36%, significantly lower than that of the Hong Kong Exchange (57.35%) and the Japan Exchange (103.6%).
Analysts have suggested several strategies to revive interest in the SGX, including adopting “enhancement programs” similar to those in Japan and South Korea.
The review committee will be chaired by Chee Hong Tat, Singapore's second finance minister, and will include distinguished members such as Koh Boon Hwee, the current chairman of the SGX.
SGX welcomed the announcement and expressed its commitment to working closely with the review team. SGX RegCo, the exchange's regulatory arm, also aims to “enhance accountability, transparency and market discipline.”
“Only a comprehensive, ecosystem-wide approach can lead to transformative actions that will drive improvements in liquidity and pricing in the Singapore equity market,” SGX said.