Woo more small companies. regulators urged.
Singapore-listed equities have been struggling with lacklustre trading volumes and muted investor demand of late. To revitalise the Republic’s struggling capital markets, the Singapore Business Federation (SBF) believes that policymakers need to consider three radical changes.
First, the government should consider channelling CPF monies into the local stock exchange, in order to boost investor confidence and revive interest in the local market.
"The Government should consider separating the CPF component and managing it differently as how pension funds are managed. This will free these funds from the GIC investment restrictions and will likely result in some investments in the Singapore market," the SBF noted.
The SBF also suggested that market regulators should consider developing another market platform to address the gap between Catalist and the SGX Mainboard. This platform will appeal to a group of “middle class” companies, or those that have achieved stable performance but are relatively moderate in size.
“These companies will find comfort amongst their peers and will not have to fight with the other classes of companies for market attention. As we widen the investor pool, this additional platform can differentiate the listed companies for more targeted attention by investors,” the SBF said.
Lastly, the SBF noted that Singapore should also explore supplementing its public securities exchanges with private securities exchanges such as those for private equity, similar to those that exist in Taiwan and the US.
“These can provide more platforms for enterprises and entrepreneurs to raise capital and allow investors with different risk appetites to participate. These can also provide more platforms for enterprises and entrepreneurs to raise risk capital for innovation,” the SBF said.
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