Dear readers, Singapore stands at an economic inflection point once again.
Faced with persistent global uncertainties—from escalating US tariffs to evolving geopolitical tensions—the city-state has launched a strategic reassessment of its economic priorities. This fresh push, as recently announced, includes five dedicated committees led by political office-holders, tasked with engaging industry stakeholders and producing concrete policy recommendations.
As these review committees gear up to define Singapore’s next phase of economic transformation, a natural question arises: Should we also take a second look at the stock market reforms under the Equities Market Development (EMD) initiative?
The EMD initiative—helmed by the Singapore Exchange (SGX), the Monetary Authority of Singapore (MAS), and key industry stakeholders under the banner of the Equities Review Group—was launched to revitalize Singapore’s equity market. But that was then. The world has changed, and so must our response.
In this article, we explore why the time may be ripe for a reassessment of our equities market reform strategy, how global headwinds are reshaping investor sentiment, and why synchronizing our stock market strategy with broader economic reforms could unlock a more resilient and competitive future for Singapore.
REFORMING AMID GLOBAL UNCERTAINTY: A CHANGING LANDSCAPE
When the Equities Review Group first convened to address stagnation in Singapore’s stock market, global macroeconomic conditions were already challenging. Inflation was high, interest rates were rising globally, and Singapore’s stock market faced stiff competition from regional exchanges like those in Hong Kong and Tokyo. The initial goal was clear: rejuvenate the capital markets, attract more listings, and deepen investor engagement.
However, today’s challenges are more complex and urgent.
The reimposition of broad-based tariffs by the United States on major trading partners, including sectors that affect Asia’s supply chain, has raised concerns about trade fragmentation. Global companies, including those operating in or investing through Singapore, are increasingly rethinking supply routes and capital deployment. Add to this the persistent war in Ukraine, volatile oil prices, and rising US-China tensions, and it becomes apparent that Singapore’s previous capital market assumptions may no longer hold.
The Equities Review Group’s recommendations, though well-intentioned, were conceived in a different geopolitical and economic context. A recalibration may therefore be necessary—not because the original measures were flawed, but because the world around them has shifted dramatically.
THE EQUITIES MARKET DEVELOPMENT (EMD) INITIATIVE: A RECAP
Launched in 2024, the EMD initiative was an ambitious attempt to breathe new life into Singapore’s stock market. The core components included:
- Improving market liquidity – by encouraging more analyst coverage and introducing designated market makers.
- Enhancing investor education – through investor relations grants and greater outreach.
- Strengthening pre-IPO support – with better mentorship and regulatory clarity for companies considering a public listing.
- Expanding the investor base – including greater outreach to family offices, institutional investors, and regional capital pools.
While some progress has been made—evidenced by increased analyst coverage and a few successful IPOs like NTT DC REIT and China Medical System Holdings—challenges remain. Daily trading volumes on SGX have not meaningfully picked up. Many REITs and blue-chip stocks remain undervalued compared to regional peers. Retail participation, while improving, is still tepid compared to markets like South Korea or the US.
NEW FACTORS AT PLAY: WHY A RELOOK IS NEEDED NOW
1. US TARIFFS AND RISK REPRICING
The US’ recent reinstatement of tariffs introduces a new layer of risk for global investors. Supply chains may need to be reorganized, margins may be compressed, and companies operating in Asia may need to rethink where and how to raise capital.
Singapore, as a neutral and trusted financial hub, is well-positioned to benefit from capital reallocation—but only if its equity markets are seen as vibrant and responsive. The current playbook under the EMD may need to be expanded to include:
- Sector-focused equity clusters (e.g., semiconductors, clean tech, data centres),
- Strategic government-backed anchor investments in IPOs,
- And improved hedging and derivative instruments to help global investors manage risk on SGX.
2. GEOPOLITICAL SHIFTS AND GLOBAL CAPITAL FLOWS
The flight to safety in recent years has benefitted US and Japanese markets, with large inflows into their stock and bond markets. Singapore needs to make a stronger case for itself—not just as a financial centre but as a destination for long-term equity investment.
We are already seeing early signs of foreign capital returning. For example, the Avanda ASEAN Growth Fund and Amundi ASEAN Equity have both increased their exposure to Singapore equities in recent quarters. ETFs like AVDV (Avantis International Small Cap Value ETF) have also upped their Singapore allocations.
To capitalize on this trend, Singapore must ensure its equity market reforms reflect this renewed interest and offer scalable products and investable themes.
A TIMELY OPPORTUNITY FOR ALIGNMENT
The committees currently reviewing Singapore’s broader economic strategy could—and arguably should—coordinate closely with the Equities Review Group. Why?
1. Economic Strategy and Capital Market Strategy Are Interlinked
If Singapore is going to reorient its economy towards sectors like advanced manufacturing, fintech, AI, green energy, and healthcare, then its equity markets must reflect and support this direction. That means fostering listings from companies in these sectors, developing sectoral indices, and creating thematic ETFs that investors can access easily.
Currently, many of the new-economy companies that Singaporeans invest in are listed in the US (think Tesla, Nvidia, or Palantir). Why not have Singapore-listed equivalents in green tech, AI or biotech?
2. Converging Incentives Can Multiply Impact
Grants and policy support aimed at business transformation (e.g., digitalisation, internationalisation, green transition) can be tied to capital market milestones. For example, companies receiving Enterprise Singapore support might be given additional incentives if they also commit to a local IPO or dual listing on SGX.
This would not only deepen Singapore’s equity market but also help local enterprises scale faster, backed by local capital.
LESSONS FROM RECENT IPOs: SIGNS OF HOPE
The recent IPOs of NTT DC REIT, which was oversubscribed by 9.8 times, and China Medical System Holdings, which saw strong post-listing performance, show that the appetite for quality listings is still present in Singapore—when the product is right.
However, the market also quickly punished weak post-IPO performance. NTT DC REIT traded below its IPO price shortly after debut despite initial enthusiasm. This underscores the need for:
- Better post-listing investor relations,
- More robust valuation models and disclosures,
- And active secondary market support (e.g., designated market makers).
These refinements—if integrated into the broader EMD framework—can boost market confidence.
SUPPORTING RETAIL INVESTORS: CRUCIAL FOR MARKET DEPTH
Singapore’s retail investor base remains cautious. Many investors prefer low-risk options such as T-bills, fixed deposits, and CPF-linked investments. But a healthy equity market needs vibrant retail participation.
To that end, any refresh of the EMD strategy should include:
- Broader educational campaigns focused on equity risk and returns,
- Retail-friendly platforms for fractional share ownership,
- Low-cost SGX-listed ETFs that track thematic growth sectors,
- More transparent and timely disclosures from listed firms.
Additionally, the government could consider expanding CDCs or national dividends as optional SGX investment credits, akin to Hong Kong’s approach with e-vouchers, enabling more Singaporeans to become investors.
TIMING IS EVERYTHING
The mid-2026 timeline for the broader economic strategy review gives Singapore a window of opportunity. A synchronized review of the EMD strategy now—rather than years later—would allow:
- Early alignment with broader economic targets,
- More effective resource deployment across agencies,
- And a cohesive narrative to international investors about Singapore’s long-term growth.
In a world where perception drives capital flow, Singapore must show agility, cohesion, and vision.
CONCLUSION: THE CASE FOR A RELAUNCH, NOT A REWRITE
The EMD reforms were a step in the right direction, but reforms cannot remain static when the environment keeps evolving. Rather than tearing down what has been built, Singapore can—and should—refresh and relaunch its equities market vision to match the urgency of our times.
A relook at the stock market review process, alongside the broader economic committees’ recommendations, is not just timely—it is strategic. Together, these reforms can form a virtuous cycle of economic growth, capital market vitality, and investor confidence.
The moment calls for bold recalibration, not passive patience.