The Singapore authorities, SGX, publicizes measures to stimulate the inventory market
An escalator past an electronic screen and ticker board at the Singapore Exchange.
Lee Yen Nee | CNBC
SINGAPORE – The Singapore government on Friday announced a series of initiatives to attract “promising high growth” companies from across the region to the local stock exchange.
Singapore is a preferred listing destination for REITs or real estate investment trusts. But the city-state is struggling to attract blockbuster stock market offers from the technology sector, which has been one of the top investment themes in global markets.
“We had tech companies that really caught on, like Nanofilm. We clearly want to see more of it, ”said Loh Boon Chye, CEO of the Singapore Exchange, in an exclusive interview with CNBC.
Nanofilm Technologies International, supplier of protective coating materials for smartphones and televisions, made its trading debut at SGX last year. It was the first major non-REIT IPO in years.
The Singapore government announced on Friday that it will be investing with state-owned investment firm Temasek in a new fund to help companies raise capital through public listings – whether primary, secondary or dual – in the city-state.
The fund starts with an initial tranche of $ 1.5 billion Singapore ($ 1.1 billion).
Here are other initiatives that have been announced:
- The investment arm of the Singapore Economic Development Board plans to set up a new fund to invest in later-stage companies and work towards a possible listing in the city-state. The fund starts with up to 500 million Singapore dollars.
- The financial regulator, the Monetary Authority of Singapore, will increase its grants to help companies meet the cost of listing.
- The stock exchange operator Singapore Exchange will help high-growth companies raise funds privately before going public.
“We know the initiatives we are launching today are not a silver bullet,” said Singapore’s Minister for Trade and Industry, Gan Kim Yong, in a speech announcing the measures.
“But we believe that they will blow the sails of our stock market and make SGX not only a viable but also a compelling option for innovative growth companies seeking a public listing,” he added.
The minister said four local startups achieved “unicorns” status this year after reaching $ 1 billion or more in value. The newest of the four is the online marketplace start-up Carousell.
These companies and others across Asia in high-growth sectors are “growing up” and may seek to get listed in public markets in the years to come, Gan said. “So we should try to anchor these companies in Singapore,” he added.
In recent years, the SGX has initiated initiatives to promote IPOs.
Earlier this month, the stock exchange announced new rules to allow for the listing of Purpose Acquisition Companies or SPACs. The move was seen as an opportunity to revive the Singapore IPO market.
The exchange’s CEO told CNBC there was a “robust pipeline” of potential SPAC listings – and the first filing could be in a few weeks.
Singapore’s stock market has outperformed many of its regional competitors this year, with the Benchmark Straits Times Index up around 7.8% at close of trading on Thursday.
But IPOs on the Singapore Exchange were lackluster by comparison. In the first half of this year, Singapore saw just three initial public offerings that raised $ 200 million, while the other financial center, Hong Kong, saw 46 initials that raised $ 27.4 billion.
– CNBC’s Weizhen Tan contributed to this report.
Correction: This article has been updated to reflect the SGX CEO said the first SPAC filing, not a listing, could be completed in a couple of weeks.