Bloomberg - Singapore is looking to set up a S $1.5 billion round of investors backed by state investment firm Temasek Holdings Pte. to bolster its stock market, which has struggled with slow listings and tepid trading.
The fund will invest in high-growth companies and initial public offerings. Separately, the investment arm of the Economic Development Board, a government agency for foreign investment in Singapore, will put up to S 500 million into a fund aimed at companies looking to list in two to five years.
We know that the initiatives we are launching today are no magic bullet. However, we believe they will blow new wind into the sails of our public equity market, Minister of Trade and Industry, Gan Kim Yong told reporters on Friday.
The plan, released by Bloomberg on Sept. 14, is intended to increase the city-state's attractiveness as a place for capital raising for local and regional companies, the government said. Stock exchange company Singapore Exchange Ltd. is also involved.
It s a step in the right direction, but the total amount is small for now and we may need more measures for the needle to move more fully, said Terence Chua, an analyst at Phillip Securities Research Pte.
Singapore s bourse has struggled in recent years with low-risk listings and tepid equity trading liquidity. This month the SGX was able to launch a framework for listing companies and signed a partnership with Thailand on depository receipts.
We are not doing this just for the sake of with high valuations or market cap. It is to give the most promising startups and entrepreneurs from Singapore and throughout the region another engine of growth, Gan Kim Yong said.
Here are some big steps announced on Friday:
The government and Temasek will set up a new fund that will have a starting tranche of S $1.5 billion to pump into startup fundraising and pre-IPO financing of high-growth companies. The Economic Development Board Investment Group will start a Growth IPO Fund of as much as S $500 million initially to invest in companies that are technology innovators and two or more funding rounds away from listing publicly. The fund will partner with the companies to help them expand with a view towards an IPO in Singapore. The Monetary Authority of Singapore s grant to pick up the tab for companies listing costs, initially introduced in 2019, will be increased. SGX will work with companies to provide customized capital market solutions, ranging from private raising to enhancing liquidity.
The Straits TimesStraits Times Index was also a little changed on Friday.