Effectiveness of Anchor and Growth Funds in Attracting High-growth Companies to List on SGX
Ministry of Trade and IndustrySpeakers
Summary
This question concerns the effectiveness of the $1.5 billion Anchor Fund @ 65 and $500 million EDBI Growth IPO Fund in attracting high-growth companies to list on the Singapore Exchange (SGX). Mr Yip Hon Weng inquired about optimizing these funds and enhancing SGX's appeal amidst global competition and challenging equity market conditions. Minister for Trade and Industry Gan Kim Yong responded that these funds have invested in nine companies since 2022 and are preparing them for listing through profitability coaching and industry engagement. He highlighted that these efforts are supported by the Grant for Equity Market Singapore (GEMS) scheme, which defrays listing costs and increases research coverage. Additionally, the Minister noted that SGX is expanding regional collaboration, such as through a Memorandum of Understanding with the Indonesia Stock Exchange, to support high-growth firms.
Transcript
3 Mr Yip Hon Weng asked the Minister for Trade and Industry (a) how effective are the $1.5 billion Anchor Fund @ 65 and $500 million EDBI Growth IPO Fund in attracting high-growth companies to list on the Singapore Exchange (SGX); (b) whether these funds can be further optimised to incentivise early-stage listings and boost SGX's IPO appeal; and (c) how will the Ministry overcome current challenges and global competition to foster collaboration and drive innovation within our broader financial ecosystem for a more vibrant financial hub.
Mr Gan Kim Yong: Singapore is doing well as a financial hub. We remain the largest Foreign Exchange (FX) centre in Asia and a key regional gateway in asset management. Major players in banking, insurance, capital markets and asset management continue to expand here, bringing with them new capabilities and product innovation. At the same time, the Monetary Authority of Singapore (MAS) is actively collaborating with the industry players to capture new growth opportunities in fintech, artificial intelligence (AI) and sustainable finance.
However, the last two years have been more challenging for equity markets globally as a result of inflationary pressures and the high interest rate environment. In 2023, the total number of initial public offerings (IPOs) and IPO proceeds globally declined to 1,298 IPOs and US$123.2 billion raised, from the 2021 peak of 2,436 IPOs and US$459.9 billion raised1. The equity markets in Singapore and the region have been similarly affected.
Since their establishment in 2022, the Anchor Fund @ 65 and Growth IPO Fund have invested in a total of nine companies. Both funds are working closely with their portfolio companies to prepare them for IPO when the opportunity arises. This includes, advising the companies on the listing requirements of the Singapore Exchange (SGX), driving growth and profitability and facilitating engagements with investment banks and market makers.
The efforts of the funds complement a broader suite of initiatives to improve the attractiveness of SGX for IPOs. This includes MAS' Grant for Equity Market Singapore (GEMS) scheme, which helps to defray listing costs and increase research coverage of SGX-listed stocks. SGX has also improved access to regional capital markets, such as through the recent Memorandum of Understanding with the Indonesia Stock Exchange, to explore collaborative opportunities, while providing bespoke capital market solutions to support the needs of our high-growth companies.