Capital market reforms launched to spur listings: analyst

Morgan Stanley noted that Singapore is actively encouraging listings and fund activity through “bold new measures.” 

Singapore is pressing ahead with sweeping capital market reforms aimed at restoring its competitiveness as a listing venue and bolstering investor confidence.

In a new equity strategy report, Morgan Stanley highlighted the changes as a move toward “a more pro-enterprise stance,” marking a departure from prescriptive regulatory models in favor of a more disclosure-driven approach.

According to the report, the Singapore Exchange Regulation (SGX RegCo), in partnership with the Monetary Authority of Singapore and the Listings Advisory Committee, has launched a public consultation process on key proposals.

These include the plan to “streamline Mainboard admission criteria: focus on disclosure rather than prescription for qualitative criteria; calibrating quantitative criteria such as the profit test.”

Another major change is the “removal of the financial watch-list,” which previously flagged issuers with sustained losses. Whilst companies will still be required to report three consecutive years of losses, the half-yearly review mechanism will be “provisionally suspended.”

SGX RegCo is also proposing to “shift from public to private queries,” focus more narrowly on material disclosures, and automatically expire “trade-with-caution” alerts after two weeks.

On the fiscal side, Morgan Stanley noted that Singapore is actively encouraging listings and fund activity through “bold new measures.” These include a “20% corporate income tax rebate for five years” for primary listings, and a 10% rebate for secondary ones.

New fund managers investing in Singapore-listed equities will receive a “5% concessionary tax rate for five years,” contingent on growth and portfolio allocation benchmarks.

The report also drew attention to MAS’s decision to deploy “S$5bn into selected actively managed funds that invest in Singapore stocks,” especially those not limited to index constituents. This is part of a broader strategy to improve market depth and diversify capital flows.

To address the persistent research gap in small and mid-cap coverage, Morgan Stanley noted that the Grant for Equity Market Singapore scheme will be expanded “to include research coverage on pre-IPO companies” with an emphasis on under-covered sectors.

Simultaneously, the Global Investor Programme will now require applicants to “deploy S$50mn into Singapore-listed equities” as a condition for permanent residency eligibility.

Morgan Stanley described these combined measures as “key positive drivers for the market,” with additional reforms expected in the second half of 2025.

The firm maintained its Overweight rating on Singapore Exchange Ltd., citing continued reform implementation and strong recent trading volumes as bullish indicators.