Singapore rolls out tax rebates, $3.7 billion program to boost stock market

The statement offers more details on measures Singapore’s equities market review group announced on February 13 to revive its stock market that has come under pressure from a dearth of mega listings and softer trading liquidity.

“We aim to have these measures lay the foundations for a sustainable and well functioning equities market, and we think if we take the proposed measures together, they will hopefully make an impact,” Singapore’s second finance minister Chee Hong Tat said in a briefing on Friday.

Singapore’s central bank, the Monetary Authority of Singapore or MAS, set up the review group chaired by Chee in August last year to recommend measures to strengthen equities market development in the country.

The review group said in a statement that MAS and the Financial Sector Development Fund will launch the S$5 billion program, called Equity Market Development Program, which will draw in investments from other investors over time.

MAS will begin evaluating eligible fund managers and strategies for the program over the next few months. They should be actively managed and invest in a range of companies in Singapore and not just index component stocks. Other measures include narrowing the qualifying investment categories for new family office applicants under the Global Investor Program to equities listed on approved Singapore exchanges. Single family offices are one-stop firms that manage the finances of the very wealthy.

This compares to current categories that range from qualifying debt securities to non-listed Singapore-based operating companies that family office applicants under the program must deploy at least S$50 million to invest into.

To attract listings, the review group announced measures including a 20% corporate income tax rebate for new primary listings and a 10% tax rebate for new secondary listings with share issuance.

The overall proceeds raised from Singaporean IPOs was $152.3 million last year, 37.7% higher than $110.6 million in 2023, but just 4.6% of the total market share of the whole of Southeast Asia, according to LSEG data.

Nevertheless, the outlook is improving with a slew of companies potentially looking to go public in the country, including Singaporean private healthcare group Foundation Healthcare Holdings and the data centre real estate investment trust of Japan’s Nippon Telegraph & Telephone Corp.

Singapore’s initiatives to revive the domestic stock market, coupled with factors such as inexpensive valuations and high dividend yields, led analysts at JPMorgan to upgrade Singapore equities to “overweight” on Wednesday. ($1 = 1.3368 Singapore dollars)