Make (Singapore) Equities Great Again

ADJOURNMENT MOTION

The Deputy Leader of the House (Mr Zaqy Mohamad): Mr Speaker, Sir, I beg to move, "That Parliament do now adjourn."

Question proposed.

Make (Singapore) Equities Great Again

Mr Speaker: Mr Louis Chua.

6.04 pm

Mr Chua Kheng Wee Louis (Sengkang): Mr Speaker, I would like to give notice that the hon Member Assoc Prof Jamus Lim is also keen to speak on the Motion standing in my name under Standing Order 2(8)(b), and therefore, I propose to share the 20 minutes of speaking time with him. May I proceed as proposed?

Mr Speaker: Please go ahead.

Mr Chua Kheng Wee Louis: Thank you, Speaker. Allow me to first declare that I am an equities analyst working in a financial institution in Singapore.

On that note, Mr Speaker, I rise today to speak on an issue that is very close to my heart: the future of Singapore's equities market and by extension, Singapore's role as a global financial centre. Through this Adjournment Motion, I hope we can make Singapore equities great again.

For more than a decade, I worked as a sell-side equities analyst and observed the continual decline in the vibrancy of our capital markets. We witnessed the S-chip crisis, market shrinkage as de-listings far outstripped new initial public offerings (IPOs) and the painful erosion of investor confidence. Our market liquidity had fallen behind not just global bourses, but even regional neighbours'. Every day, this trend affected real lives and livelihoods across our capital markets ecosystem.

In 2024, I put forward the Parliamentary Question on this issue, and the Government's reply, though well-intentioned, felt insufficient. It lacked the bonus needed to reverse decades of decline, with Prime Minister Lawrence Wong sharing that conditions remained challenging for the Singapore equities market as they are for stock exchanges in other countries.

But thankfully, that has changed. I welcome the Government's markedly stronger resolve and put on record my appreciation to the Equities Market Review Group for its work. In particular, I appreciate that the $5 billion Equity Market Development Programme (EQDP) funding demonstrates genuine commitment. And I hope that this will not be a one-off measure but represents the start of a continued commitment to the Singapore market.

That said, as I shared in my Committee of Supply speech in February 2025, our measures must be bold enough to bring our equities markets into the future. However, I believe that the current recommendations by the review group may be necessary but not sufficient to truly drive permanent change. The two work-streams appear to be focused on reducing market friction rather than instituting structural interventions that improve company fundamentals in the long term. Without three critical additional pillars, we risk repeating a familiar pattern, with Thailand’s Vayupak programme providing a cautionary tale.

Let me first establish the scale of Singapore's challenge which my learned colleague, Kenneth Tiong, had earlier shared in his speech on the Finance Bill.

Putting aside the comparisons with other western developed markets, as of end January 2026, 61% of Singapore Exchange (SGX) companies generated return on equity below 8%, compared to 44% in Japan and 24% in Korea.

Too many of our companies are delivering uncompetitive returns. On liquidity, the difference is even more stark. Only 14 SGX-listed companies have daily trading volume above US$20 million. Japan has 305, Korea has 172, Hong Kong has 160.

But perhaps, more telling is this. Based on research from early 2025, 69% of Singapore-listed companies have shrunk in market capitalisation over the past decade. In Japan, the figures only 14%. Only 11% of our companies have doubled their market capitalisation in 10 years, compared to 50% in Japan. It appears the odds are not quite in your favour when looking at investment outcomes in Singapore.

The review group's report states that companies that invest in building strategic shareholder value and communicate their plans effectively will attract strong investor interests. That is precisely correct. But here is the critical gap. The report contains no mandatory disclosure requirements compelling companies to demonstrate improved shareholder returns. An EQDP fund manager told The Edge Singapore in December 2025: "At the end of the day, what we are looking for is earnings growth, ROIC [return on invested capital] going up, ROE [return on equity] going up. That is really what our main focus is". Yet, our framework offers no mechanism to compel disclose commitments towards these fundamentals.

As I have shared in my Committee of Supply speech in February 2025, Japan and Korea have already shown the way. They did not rely on volunteerism. They implemented market-wide directives, creating existential pressures on companies to perform. In the case of Japan, in March 2023, the Tokyo Stock Exchange (TSE) issued a formal request to companies to act on what they called management conscious of cost of capital and stock price. This was not a good-to-have, but a structured disclosure framework with specific requirements. The TSE published a monthly list of companies by their disclosure status, creating constructive market pressure. And within a year, more than half of prime companies have disclosed initiatives, and that is now above 90%.

Here is a crucial part. Companies that put genuine effort into high-quality disclosures outperformed their peers by meaningful margins over the subsequent 12 months.

Korea's Value-up Program, launched in February 2024, requires companies to assess capital efficiency, set quantify ROE and ROIC targets, and disclose dividend and treasury shares plans. Korea has also amended its Commercial Act to expand directors' fiduciary duties to all shareholders and directors themselves have to be accountable now.

Turning to Singapore, while the Value Unlock Programme aims to promote value creation and shareholder engagement, the key measure to achieve this is a $30 million grant. Perhaps, small and newly listed companies may be able to benefit, but for the vast majority of companies, they can very much maintain the status quo after the review group's recommendations are implemented. Companies face no additional disclosure or regulatory requirements to demonstrate how exactly they are going to drive higher shareholder returns or unlock value.

While we are asking the EQDP fund managers to deploy more than $5 billion in capital and expect returns, our listed companies feel no compulsion to demonstrate commitment to improving fundamentals.

What then must Singapore do? We must institute mandatory value-up disclosure requirements immediately. At the most basic level, all listed companies should conduct formal board level assessments of capital costs, profitability and market valuation. Companies must then disclose quantified ROE and ROIC targets across medium- to long-term time horizons and spell out specific plans with annual progress reporting. If the Monetary Authority of Singapore (MAS) believes this to be important, then, I hope a clear timeline on when this may be implemented can be announced.

But disclosure alone is not sufficient. We must also strengthen and enforcement. The review group states efforts to enhance investor recourse avenues must be complemented by robust public enforcement actions. MAS will continue to work with relevant authorities to pursue and take firm actions against wrongdoers. I agree.

I understand the Government's perspective that value creation is the responsibility of boards and management, not regulators. Regulators should not micromanage, but regulators have to maintain standards that protect investors' confidence, ensure fair and timely disclosure and enforce meaningfully against wrongdoers. To quote remarks by Mr Lim Tuang Lee, Assistant Managing Director at the MAS at the SSGI Forum in 2025, "too many companies here limit themselves to the bare minimum disclosure requirements and in doing so, miss the opportunity to articulate strategic visions and plans."

My concern is that even when minimum requirements exist, companies ignore them. SGX rules require disclosure of directors and chief executive officers' remuneration since January 2023. Yet, only 68% of companies disclose exact remuneration by December 2024. Without consequences for non-compliance, why would companies comply? And it is hard to blame companies for refusing to comply on this. After all, the stewards of our national reserves, Temasek Holdings and GIC do not have mandatory remuneration disclosures at all.

I welcome the MAS announcement in May 2025 that a committee is reviewing the Code of Corporate Governance. I hope that refreshed code can hold companies accountable for disclosure lapses to instil investor confidence in our governance regime.

On a related note, the review group advocates for a decisive shift towards a disclosure-based regime, streamlining prospectus requirements and consolidating listing reviews under SGX RegCo to improve time to market.

While reducing regulatory fiction is pro-enterprise, it raises concerns about investor protection. I am reminded of my own experience being a sell-side analyst covering Noble Group, back when Iceberg Research wrote an exposé on alleged accounting fraud at the commodities trader. In 2022, after years of investigation into Noble's disclosures, MAS imposed a $12.6 million civil penalty. Although the case was undoubtedly complicated, one cannot help but feel that the penalties handed out were noticeably disproportionate to the billions that investors lost alongside the company's downfall.

Section 199 of the Securities and Futures Act requires not merely that a material statement or information was false or misleading, but that the wrongdoer either does not care whether it was true or false or knows or ought reasonably to have known that the statement of information is false or misleading in a material way.

Firstly, this is a high bar; and secondly, perhaps as the Noble Group case has shown and as I have shared in my Parliamentary Question in 2022, there perhaps ought to be more robust disclosure obligations and enforcement actions relating to false and misleading statements, and breaches of disclosure requirements.

Allow me now to pass the time to my colleague, Assoc Prof Jamus Lim, who will take us through his thoughts on a third pillar premised on macro-financial reform.

Mr Speaker: Assoc Prof Jamus Lim.

6.13 pm

Assoc Prof Jamus Jerome Lim (Sengkang): Sir, let me begin by echoing the sentiments set forth by my hon friend, Louis Chua, on how the work of the MAS and Equities Market Review Group are a positive step forward. As he shared, these efforts appear to be targeted toward improving market efficiency and functioning, but somehow still fall short of the sort of structural reforms necessary to foster sustained corporate value creation.

Mr Chua suggested two change pillars – enhanced shareholder value, the mandatory disclosures and strengthened corporate governance with more robust enforcement – both of which address reforms to market micro-structure.

In closing, I will take a step back and offer a third pillar premised on macros-financial reform: enrich the capital raising life cycle.

Let me first expand on what Mr Chua shared about the current challenges of our stock market, but from a more macro and comparative perspective.

Our market for publicly listed stocks currently lags those of many other countries, even those with far less developed financial sectors. Singapore's stock market capitalisation, as a share of national output, stood at 117% last year, between India and Malaysia. This is in spite of India's overall financial development being more than two times lower than Singapore's, and Kuala Lumpur being miles away from us as a global financial centre.

Perhaps, more worryingly, this share has steadily eroded over the past two decades. Capitalisation almost reached 300% on the eve of the Global Financial Crisis, but this has steadily eroded by more than three-fifths. This trend is heading in precisely the wrong direction if the goal is to fortify our stock market. Nor should we rest easy just because of SGX's recent performance. The SGX certainly did well last year, posting returns closer to 30%. But so did the stock exchanges of Pakistan, Sri Lanka and Vietnam – and few would claim that these markets are the benchmarks we should aspire to.

Make no mistake. Returns are distinct from liquidity and the primary role of any stock market is to raise capital to fund investments, with returns being secondary.

Our private equities markets fare little better. One estimate places our venture capital market at around $1.2 billion in 2024, a small fraction of the more than $4 billion raised by comparable early-stage rounds from either the Bay Area or the United Kingdom.

Even when scaled to per capita terms, we fall short of a country, like Israel. Hence, while we are deniably successful within East Asia, we remain a distance behind the global leaders.

Indeed, our problem appears more general. Singapore's financial market debt is four-fifths those of South Korea, an economy whose financial developed markets are typically regarded as less sophisticated than ours, and only a little more than half that of Hong Kong, our major financial centre competitor.

While we have made headway in certain segments, notably foreign exchange and real estate, our financial markets still fall short in one of the key functions – to raise funds for doing business.

Improving the life cycle for capital raising, therefore, requires us to look at the full stack for corporate finance – from angel through different stages of venture investments by private equities to IPOs on the secondary board followed by possible graduation to the main board.

Our angel market is mature but shallow. There are close to two dozen angel and seed investment networks here, of which the most prominent, the Singapore Angel Network and the Business Angel Network of Southeast Asia, are well established. The funding environment is liquid with hundreds of deals annually. Moreover, four in five investors even report optimism about the ecosystem.

The Government has also extended significant support to the startup scene. There is both grant money as well as tax breaks for angel investments and co-investment opportunities. Officially sanctioned hubs abound, such as Block 71 and Stage One, along with other incubators and accelerators located in the One-North complex.

The National Research Foundation has also been active in supporting innovations in deep technology, including the launch of the $50 million Graduate Innovation Research Programme to support locally based entrepreneurs.

Given this backdrop, the stage for this stage of the venture cycle appears well positioned.

I, therefore, second the recent decision by Temasek to back away from directing exposures to early stage investing and instead focus on later stage, meaning Series B and later funding rounds. This is logical given Temasek's relative size which makes deploying relatively small sums of capital challenging and potentially, inefficient.

But it is also vital that the institution deepened domestic liquidity for later venture capital stages, which leads me to favour an even stronger focus on the pre-IPO stage with a clearer mandate to target locally based companies. This will help catalyse the market for private investor exit while simultaneously easing the transition of firms to public investment on the secondary board.

There are already some Government-directed efforts on this front, the $1.5 billion Anchor Fund @ 65 and $500 million Growth IPO Fund have been in place since 2022 to support high growth firms with public listings. However, such efforts are relatively small and perhaps, more importantly, incomplete.

Rather than one-offs, what is needed to generate market activity is continuous reinvestment. It will be better to simply enfold these entirely into Temasek's overall portfolio while channelling the fund toward funding more domestic opportunities. The goal is to usher companies toward an eventual listing and to choose SGX as their outlet.

In my view, the fate of our main board will ultimately be tied and dependent on how vibrant our secondary board is.

Alas, activity on Catalist has been disappointing. Last year, there were only six IPOs and it was four the year prior. Association of Southeast Asian Nations (ASEAN) bourses have all found greater success in their public offerings with Indonesia and Malaysia dominating the region in terms of listing as well as fundraising capacity.

We must shore up local listings on Catalist to increase its attractiveness as an exit destination for our otherwise robust earlier stage venture ecosystem.

The problem is one of chicken and egg. Presently, low liquidity has made venture capitalists wary of listing on this board, while the small number of new listings in turn limits trading and turnover, thereby becoming a self-fulfilling prophecy. Breaking this negative equilibrium that SGX has found itself in will require, pardon the pun, a catalyst in the form of temporary stimulus to IPO activity.

This Government understands this. It has, since 2019, sought to underwrite listing expenses with the Grant for Equity Market Singapore Scheme (GEMS), but GEMS is presently biased in favour of main board listings rather than Catalist and it is unclear how much take-up there has been for this scheme.

MAS has also tabled proposals for streamlining primary and secondary listings. This is a positive step which I support. We may also consider piling on financial incentives, such as granting firms that may choose to list continued recognition as SMEs for tax purposes over an interim period as an additional inducement.

I should stress that easing listing requirements does not imply weaker regulation in the long run, contrary to the points made by my hon friend about transparent disclosures and strengthen governance. Rather, I am arguing for initial forbearance to strengthen incentives to list here in the first place.

Enhancing stock market liquidity should not be limited, of course, to public sector incentives alone. We should also enlist our ecosystem of family offices more into this effort – the favourable tax treatment for family offices under sections 13O and 13U of the Income Tax Act only applies when a minimum allocation is made to qualifying investments. This may be further refined to require a minimum allocation to onshore allocations specifically.

We can also do more with other private sector institutional accounts. There are excellent examples of stakeholder capitalism around the world, including Germany, Japan and Scandinavia.

Setting aside advantages and disadvantages of such arrangements, it is difficult to deny that channelling more buy-side exposure toward the SGX would likely improve market depth and foster greater vibrancy. To encourage take-up, we could grant tax-free status for employee stock ownerships. We could even consider giving further inducements to retail investors to leverage the participation of average households. One in two Singaporeans already own stocks and half of the local exchange is already held by individuals. The Central Provident Fund Investment Scheme already allows an opt-in for Singapore-listed shares on the SGX. It will be a small leap to further promote responsible retail ownership of the local market index, ideally through revisions in the Lifetime Retirement Investment Scheme (LRIS) or through additional educational incentives, either associated with the LRIS or independently.

Sweden has demonstrated that such bottom-up participation can underpin stock market success.

On the supply side, we can also develop a deeper pool of front office talent necessary to ensure a robust financial ecosystem.

Mr Speaker: Assoc Prof Jamus Lim, a minute left.

6.22 pm

Assoc Prof Jamus Jerome Lim: Sir, ultimately, a successful SGX will require we pay attention to the full capital-raising cycle, from startup through listing on both the buy and sell side. Only then will we have a domestic stock market, commensurate with our status as a global financial centre and only then can we make Singapore equities great again. [Applause.]

Mr Speaker: Minister Chee Hong Tat.

6.23 pm

The Minister for National Development (Mr Chee Hong Tat): Mr Speaker, Sir, I thank Mr Louis Chua and Assoc Prof Jamus Lim for their interest and suggestions in strengthening Singapore's equities market. We welcome such feedback as part of the ongoing efforts to make our equities market more competitive.

I am pleased to report that we are making good progress with our review and have achieved some initial success.

The average daily traded value of securities on SGX grew more than 20% year-on-year to almost $1.8 billion in November 2025. The average daily traded value of securities in 2025 was the highest since 2010.

Recently, the number of Singapore-listed stocks with at least $1 million in average daily trading turnover has risen to 100. This is an increase of 40% compared to August 2024 when we formed the review group. The IPO activity rebounded significantly last year, with more than $2.4 billion in total funds raised, which is the highest level since 2019.

The total market value of listed companies on SGX also crossed the $1 trillion mark.

Sir, the growth has benefited many listed companies, many investors and these companies include both the large-capitalisation and also the small- and mid-caps.

Despite global uncertainties, the Straits Times Index (STI) delivered strong returns last year, with over 28% total returns. And over five years, STI's total returns exceeded 100% in Singapore-dollars terms, outperforming many regional markets.

As global investors rebalance and diversify across Asia, Singapore's reputation as a safe, trusted financial centre, with a strong and stable Singapore dollar, has drawn growing interest.

I hope this positive momentum continues. But we know markets have ups and downs. Our focus, therefore, must be to continue strengthening the competitiveness and attractiveness of our ecosystem.

We have worked closely with the industry to co-create solutions and implement a holistic package that strengthens both demand and supply, as well as enhancing greater connectivity that supports efficient trading.

Over the past 18 months, the Equities Market Review Group engaged widely with brokers, banks, asset managers, listed companies, prospective issuers, research providers and industry bodies and this process helped us to move beyond making individual tweaks towards a comprehensive set of mutually reinforcing moves, to get the momentum of the flywheel going.

Sir, there are three guiding principles that will continue to anchor our work.

First, implementation is key. We will focus on effective and timely implementation to translate policy ideas into market outcomes. To support this important area of work, we have established an Equity Market Implementation Committee, co-chaired by MAS and SGX.

Some of the measures have already been rolled out. For instance, we have allocated $3.95 billion across nine asset managers under EQDP to develop our fund management industry and to increase investor participation in our market. Other initiatives are on track and will be implemented over the course of the year as we modernise market infrastructure and launch new market connectivity initiatives.

Second, innovation in policy requires taking calculated risks. We adopted an approach of allowing for more risk-taking in the equities market review, and with support from Singaporeans and Members of this House, the Government will do likewise for other areas too.

As we push boundaries and take bold steps to try new ideas, we will put in place guardrails, where necessary, to protect against downside risks. We will devote more resources into public and investor education, working with partners, like the SGX Academy and the Securities Investors Association (Singapore), so that stakeholders understand that while taking more risks could yield higher investment returns, they are also prepared to face greater market volatility. This trade-off is relevant when we decide on our personal and family investments. It is also applicable when we decide on the level of risks we want to collectively take as a country.

When we shift towards a more disclosure-based regime, with regulation that is more focused and facilitative, we will continue to seek high quality listings and provide adequate and timely information for investors to make their decisions.

Key stakeholders in the ecosystem must also exercise their respective areas of expertise and responsibility – IPO professionals and research analysts have to uphold high standards of due diligence and analysis to support investors in making informed decisions. MAS will take steps to strengthen investor confidence, such as encouraging transparency and shareholder engagements through initiatives under the Value Unlock Programme, while enhancing investor protection mechanisms, especially for retail investors, such as strengthening their options for recourse against misconduct.

I take Mr Louis Chua's point that some requirements may have to be mandatory, and we are certainly open to looking at these examples. But I hope Mr Chua will agree with me that not everything that can add value to the company needs to be mandated because the companies themselves would have strong commercial interest to want to make sure they can increase their market value.

To maintain trust and confidence in our markets, MAS and the relevant authorities in Singapore will continue to work closely on robust investigation, market surveillance and timely enforcement against breaches of disclosure requirements and market misconduct.

We have also made decisive moves to enhance international connectivity. The SGX-Nasdaq Global Listing Board, when implemented later this year, will enable eligible companies to simultaneously list on both exchanges with one set of prospectus. This can help support their growth plans, widen their investor base and enhance liquidity across time zones.

Third, improving competitiveness is a never-ending journey. It is like a never-ending marathon that you just have to keep running. We will continue to listen, adapt and raise our game in partnership with the industry. And I certainly also welcome feedback and suggestions from Mr Chua, from Assoc Prof Lim and their colleagues from the Workers' Party.

Although our efforts have yielded some initial success, we cannot stand still and rest on our laurels because the competition for global capital is intense and fast evolving. We must continue to play to our strengths and we must continue to innovate to stay ahead, or we will risk falling behind and being over-taken. It is like the Chinese saying, "逆水行舟不进则退". (In English): Learning is like rowing upstream; to not advance is to fall behind.

Sir, our strategy is to make Singapore's market more attractive on its own merits, so that capital flows here because the opportunities are attractive and our ecosystem, as a whole, is strong. This philosophy underpins our different measures. We are not trying to go for a silver bullet that can, on its own, solve all the problems. There is no magic pill.

We are also not trying to force outcomes through quotas or administrative allocation. We are building capabilities – in fund management, in listed companies' ability to enhance shareholder value, to engage investors, we are investing in market infrastructure – so that investors and issuers choose Singapore because they are convinced that this makes commercial sense and this has longer-term strategic value for them.

Our goal is to build an equities market where companies sharpen their attention on shareholder value creation, communicate their strategies clearly, optimise capital allocation and thus deliver good shareholder returns.

Assoc Prof Lim is right that we also need to look at how the market can facilitate companies to grow. But I hope Assoc Prof Lim will agree with me that if you do not have good shareholder returns, you would not be able to achieve that outcome. So, the two are not mutually exclusive, they go hand-in-hand.

We also want an equities market where research coverage is broader and more insightful, where market makers operate with clarity and confidence and where trading and post‑trade are efficient and user‑friendly.

Mr Speaker: Minister, you have a minute left.

6.33 pm

Mr Chee Hong Tat: That is how our market will earn capital and participation in a sustainable way.

Mr Speaker, developing a vibrant equities market is not a one‑off campaign. It is a multi‑year effort that requires discipline, willingness to innovate sensibly and committed partnership among Government, regulators, exchanges, intermediaries, investors and listed companies.

We have laid the foundations and set in motion a comprehensive programme. If we keep at this work together in close partnership between Government and industry, and with the right incentives and a clear focus on quality and sustainability, I am confident that Singapore's equities market will grow in depth, resilience and attractiveness in the years ahead.

Question put, and agreed to.

Resolved, "That Parliament do now adjourn."

Mr Speaker: Pursuant to Standing Order 2(3)(a), I wish to inform hon Members that the Sitting tomorrow will commence at 1.30 pm. Order. Order.

Adjourned accordingly at 6.34 pm.