A new era for the underperforming Singapore bourse?

Is the underperforming Singapore bourse finally about to get a "big bang" solution which could inject more liquidity and life into it? Judging by the latest utterances of Second Minister for Finance Chee Hong Tat, Singapore Exchange (SGX) chairman Koh Boon Hwee and SGX chief executive Loh Boon Chye, there is a better-than-even chance that the problems afflicting the local bourse are getting a serious look from the powers that be.

- Ven Sreenivasan

Is the underperforming Singapore bourse finally about to get a "big bang" solution which could inject more liquidity and life into it?

Judging by the latest utterances of Second Minister for Finance Chee Hong Tat, Singapore Exchange (SGX) chairman Koh Boon Hwee and SGX chief executive Loh Boon Chye, there is a better-than-even chance that the problems afflicting the local bourse are getting a serious look from the powers that be.

At the launch of a corporate governance event by the Securities Investors Association (Singapore) or Sias on Sept 16, Mr Chee said that a robust equities market provides a venue to facilitate successful initial public offering (IPO) exits for private equity and venture capitalist investors so that they can recycle capital into other start-ups and early-stage growth companies.

"This completes a virtuous cycle of growth, innovation and a more vibrant financial market," said Mr Chee, who is also deputy chairman of the Monetary Authority of Singapore (MAS).

Mr Chee, who chairs the recently established equities market review group set up by the MAS, added that the Government is considering policy measures and incentives to improve Singapore's equities market and enterprise financing ecosystem.

He also underscored the importance of boosting the equities market to enhance investor participation and broaden market liquidity.

He noted that liquidity in the local market is concentrated in a limited number of well-known stocks, with around 85 per cent of the daily average value traded on the SGX focused on the 30 large caps that make up the Straits Times Index.

He added that the review group would look at encouraging market makers to broaden stock indexes and expand the pool of equity market derivatives, among others.

Mr Chee also said the review group would re-evaluate regulatory structures, and "prune" regulations that may no longer be necessary.