Outside the central bank headquarters in Singapore stands a sign for the Monetary Authority of Singapore (MAS).
Sam Kang Li | Bloomberg | Getty Images
The Central Bank of Singapore established a task force to strengthen the city-state's stock market.
The Monetary Authority of Singapore has announced that the research group will evaluate measures to improve the vibrancy of the Singapore stock market.
MAS said on Friday that the panel will focus on addressing market challenges, encouraging listings and facilitating market revitalization. It will also improve regulations to promote market growth and boost investor confidence.
Another important objective is to find ways to encourage private sector participation, including through capital market intermediaries, investors and listed companies.
The authority noted that a “dynamic stock market is an important part of the capital formation value chain” and that a liquid market not only allows companies to access capital as they grow, but also “enables asset owners and the investing public to participate in the growth of quality companies.”
“Improving the attractiveness of Singapore's stock market can therefore strengthen Singapore's position as a dynamic business and financial centre,” the MAS said, adding that this also “[complement] Singapore's innovation and startup ecosystem, private markets and asset management sectors.”
In spite of the Straits Times Index rising in three of the last four years, including 2024, Singapore’s stock market has long been plagued by thin trading volumes and more delistings than listings. This has led observers to describe the exchange as “dull,” “boring,” and even once in 2021, a “zombie” exchange.
The turnover rate on the SGX, a measure of market liquidity, was 36% for the full year 2023, compared to 57.35% on the Hong Kong Exchange in the same period and 103.6% on the Japan Exchange.
Analysts speaking to CNBC earlier outlined ways to revive interest in the SGX, drawing on lessons from “value-add programs” in Japan and South Korea.
The review group announced on Friday will be chaired by Chee Hong Tat, Singapore's Second Minister of Finance, and will also include members such as Koh Boon Hwee, the current chairman of the SGX.
The SGX said it welcomed the announcement and pledged to work closely with the review group.
SGX RegCo, the exchange's regulatory arm, will also seek to “enhance accountability, transparency and market discipline.”
“Only an ecosystem-wide approach can lead to transformative measures that provide new impetus to improving liquidity and listings in the Singapore stock market,” SGX said in a statement to CNBC.
