Dear readers, much has been recently talked about on efforts to rejuvenate the Singapore stocks markets.
The key initiatives from the committee tasked to review and rejuvenate the local bourse are:
- tax incentives to attract corporate and fund manager listings in Singapore, and
- a $5 billion MAS scheme through which MAS will partner with selected fund managers to invest in Singapore stocks.
The above initiatives are noble and demonstrate to the world our government efforts to make Singapore equities markets attractive to companies and investors.
On a practical note, it will take some time before we can assess whether the key initiatives will translate to a more vibrant Singapore stock markets.
I am not sure whether there are internal KPIs that are not publicly announced to measure the success of these initiative. Things like targeted number of IPOs launched on Singapore stocks markets annually. And things like the time horizon where we will assess whether or not the proposed initiatives bear fruit.
I will like to highlight that amidst our efforts to boost the Singapore stocks markets, we must not forget our efforts to defend what has worked well for the local bourse. It is akin to a soccer game where we may plan more attackers but also do not forget our defence.
Singapore stocks markets is well known for its Reits which was first launched in year 2002, that pay a good dividends.
The challenges facing our Reits are primarily:
- current high inflation rates
- low liquidity
- challenges to seek funding to carry out asset enhancement works
Paragon Reit is the latest Reit to be privatised. While Singapore stock markets still has a number of Reits, if no intervention is carried out, we may see more and more Reits becoming privatised and fewer new Reits introduced on our local bourse.
An attractive defining feature for our stock markets may will then be made less appealing.