An IPO market cannot be magicked into existence

Singapore’s latest bid to rejuvenate its lackluster IPO market smacks of desperation. The Equities Market Review Group’s first measures, unveiled with much fanfare, essentially try to coerce capital into local listings — from nudging family offices to mandating fund managers — in hopes of jump-starting a moribund bourse. It’s a classic case of grasping at straws: forcing investors into Singapore IPOs when the fundamental incentives to do so simply don’t exist. 

Business leaders should be wary of this approach. Instead of propping up an IPO pipeline that investors studiously avoid, Singapore would do better to double down on what SGX already does well. A look around Southeast Asia’s financial hubs shows that markets thrive by playing to their strengths — not by trapping unwilling investors in unprofitable deals.

The new measures make no secret of their interventionist bent. One pillar of the plan is compelling private capital to “buy local.” For instance, fund managers get tantalizing tax breaks — but only if they funnel at least 30% of their assets under management into Singapore-listed stocks. 

Meanwhile, wealthy family offices seeking Singapore’s coveted Permanent Resident status face stiffer requirements to invest in the local market. Under the updated Global Investor Programme, a single family office with S$200 million assets must deploy at least S$50 million into equities listed on Singapore exchanges. The message is clear: if you want the perks of being in Singapore, you’d better put some skin in the SGX game.

These policies amount to a quasi-obligatory IPO patronage program. Singapore is effectively saying: we know investors aren’t naturally keen on our IPOs, so we’ll strong-arm them with incentives and conditions. It’s a bold and blunt attempt to manufacture demand. But in capital markets, demand cannot be commanded by decree. Investors — especially savvy institutions and family offices — go where they see real returns and liquidity, not where a government hand is pointing. By trying to lock in a captive investor base, the authorities are treating the symptom (low IPO interest) while ignoring the disease: Singapore listings haven’t been attractive enough to earn investors’ interest on their own merits.

This heavy-handed approach ironically telegraphs a lack of confidence. If Singapore’s equity listings offered compelling value, why would tax sweeteners and PR incentives be needed to corral interest? Forcing capital into certain channels is typically the last resort of a market that has failed to excite investors organically. It’s no surprise some critics see the government’s moves as overreach. Even officials have implicitly acknowledged the perils of using state-directed money to boost the market — Second Finance Minister Chee Hong Tat noted earlier this year that directing sovereign wealth funds like GIC to plough into local stocks is “not the solution” to Singapore’s market woes​. Yet, here we are, with policies designed to box private investors into doing just that, through other means.

Why money shuns SGX listings

The fundamental issue Singapore policymakers seem to gloss over is why investors have shunned SGX IPOs in the first place. The answer is simple: they haven’t made money. A hard look at recent history shows a market that has lost its mojo. In 2024, Singapore managed only four IPOs, raising a pitiful US$30 million in total — the lowest tally in Southeast Asia​. 

That’s right, the entire year’s new listings couldn’t even scrape together S$50 million in a market that hosts some of the world’s largest sovereign wealth funds and private banks. This wasn’t a one-off bad year; it capped a multi-year slide. IPO numbers fell steadily from 10 in 2020 to 4 in 2024, with funds raised plunging over 90% in that period​. Singapore’s share of regional IPO proceeds has become almost laughable — just 2% of Malaysia’s total and 3.5% of Indonesia’s in 2024​.

Why the exodus of capital and listings? Investors vote with their feet, and many have concluded they can do better elsewhere. Singapore’s market has been stuck with thin trading volumes and low valuations, creating a vicious circle. Liquidity begets liquidity, and SGX has been losing that race. 

By one estimate, Singapore stocks trade at price-to-earnings ratios far lower than global peers — roughly 12-15x earnings on average, versus 20-25x on the U.S. Nasdaq​. That gap means companies listing on SGX often fetch a lower valuation (and thus raise less capital) than if they listed in New York or Hong Kong. Small wonder that a string of high-profile companies — from homegrown tech firms to foreign giants — have bypassed SGX in favor of venues with deeper investor pools. 

Ride-hailing and e-commerce unicorns that emerged in Southeast Asia chose New York’s Nasdaq for their IPOs, tapping into greater risk appetite and analyst coverage​. Even Chinese electric-vehicle maker NIO opted for just a token secondary listing in Singapore (with no fundraising) simply to broaden investor access, while raising its real money elsewhere​. And when Singapore’s own Institute of Advanced Medicine went public on SGX in 2024, it raised a meager US$20 million — a fraction of what it might have gotten on a larger exchange​.

Crucially, investors have also been burnt before in Singapore. In the mid-2000s, a wave of Chinese companies (the infamous “S-chips”) listed in SGX only to implode in accounting scandals, sapping investor confidence in overseas growth stories. Today’s hesitant sentiment is in part a hangover from those governance debacles — and a market still dominated by slow-growth domestic stalwarts. With such a track record, it’s not hard to see why private investors aren’t clamoring for more SGX IPO exposure. For many, Singapore equities have meant limited upside, modest yields, and liquidity constraints; by contrast, U.S. or Hong Kong markets offer scale, buzz, and better odds of a big win. Investors will go where the returns are, and lately that hasn’t been Singapore. Trying to prevent them from avoiding SGX — by boxing them in with rules — addresses none of these underlying concerns.

Regional reality check

Singapore’s urge to micromanage its capital markets stands in stark contrast to how other regional financial hubs have revitalized their own IPO scenes. Across Southeast Asia, competing exchanges have attracted listings by aligning with market fundamentals and investor interests, not by waving a big stick. Consider Indonesia: in 2023, the Jakarta Stock Exchange pulled off 79 IPOs​ — many of them sizable domestic tech and consumer plays — making it one of the world’s top five IPO markets. What drove this success? Largely, a confluence of real factors: a booming local investor base excited about homegrown growth stories, and regulatory tweaks that accommodated new economy firms. Indonesia didn’t need to force investors to show up; local appetite was naturally strong for startups-turned-blue-chips like GoTo and Bukalapak, which chose to list at home where their brand and user base were strongest. The lesson: when investors believe they’ll profit — as Indonesian retail and institutions did during the tech IPO wave — they pour in willingly.

Malaysia offers another illuminating comparison. Bursa Malaysia hosted 32 IPOs in 2023​ and an impressive 55 in 2024​, vastly outshining SGX. Kuala Lumpur achieved this by making listings attractive, not obligatory. The Malaysian exchange implemented business-friendly reforms — fast-tracking IPO approvals and even tax deductions for listing expenses — to entice companies to market​. Crucially, Malaysia has deep domestic institutional support: giant pension funds (like EPF and PNB) and sovereign institutions that willingly anchor offerings because those IPOs promise acceptable returns. This is a key difference: Malaysian and Indonesian investors see new listings as opportunities to make money, whereas Singapore’s investors have mostly seen them as opportunities to lose it. Consequently, our neighbors didn’t need to mandate investment quotas; they focused on improving the quality and appeal of the listings themselves, from corporate fundamentals to regulatory ease.

Even beyond Southeast Asia, the pattern holds. Hong Kong, often considered Singapore’s chief rival, didn’t ascend by compelling anyone to invest locally. It opened doors wide to what the market wanted: Chinese mega-listings and access to mainland investors. Reforms there allowed pre-profit tech companies and secondary listings for U.S.-traded Chinese firms, drawing a flood of IPOs. Similarly, Middle Eastern exchanges (like Saudi’s Tadawul or Dubai) revitalized their markets not by conscripting investors, but by offering crown-jewel assets (think Aramco) that global funds craved. The point is that sustainable market growth comes from aligning incentives — giving investors a reason to participate of their own accord. Singapore’s strategy, by contrast, feels like putting the cart before the horse: trying to create an investor base by fiat in hopes that compelling companies will then follow.

The contradiction at the heart of Singapore’s approach is now stark: investors haven’t been investing in SGX IPOs because it hasn’t been profitable to do so, yet the policy response is to make it harder for them to abstain. That is a recipe for, at best, begrudging participation — investors meeting the letter of the requirements while avoiding real exposure — and at worst, capital finding creative ways to bypass the spirit of the rules. Neither outcome generates the vibrant, self-sustaining market Singapore wants. In fact, there’s a risk of undermining confidence: if global family offices feel corralled, they might rethink locating in Singapore at all. A regional wealth hub can ill afford that reputational hit.

A return to basics for SGX

If strong-arm tactics won’t fix the IPO drought, what will? The answer lies in doubling down on Singapore’s genuine market strengths and refining its proven niches, rather than chasing a mirage of being “Asia’s next Nasdaq.” Despite its current doldrums, SGX has bright spots that could form the foundation of a renaissance — if nurtured correctly.

First and foremost, Singapore is already the undisputed REIT capital of Asia (ex-Japan), a position it should jealously guard and expand. The city-state boasts 40+ real estate investment trusts and property trusts with a total market cap around S$100 billion​, making up 12% of the stock market by value. These S-REITs, often backed by assets across the globe, consistently attract yield-hungry investors with their stable dividends and high governance standards. This is a natural strength: Singapore’s legal and regulatory framework for trusts is well-regarded, and global investors know it. Rather than focusing only on flashy tech IPOs, Singapore could encourage more regional property owners and infrastructure operators to list yield-focused vehicles in SGX, leveraging its reputation as a safe, well-regulated harbor for such assets. The steady income and transparency of REITs align perfectly with the kind of long-term investors Singapore wants to court. Building out this franchise — more REITs, business trusts, perhaps infrastructure funds — would play to SGX’s sweet spot and reinforce its identity as a global REIT hub (something no other Southeast Asian exchange can claim).

Secondly, Singapore should capitalize on its credibility and stability — attributes that have drawn companies to seek secondary listings on SGX, even when raising capital elsewhere. There’s a reason why firms like Hong Kong’s Helens International or China’s NIO have come to Singapore: to broaden their shareholder base and signal commitment to the Asian region’s investors​. SGX has a unique opportunity to market itself as the “secondary home” for regional champions. By streamlining dual-listing processes and enhancing trading linkages, Singapore can attract more companies to establish a foothold on its exchange. Each secondary listing brings additional liquidity, international profile, and potential future fundraisings. Over time, some of these could convert into primary listings or at least lead to more equity issuance done out of Singapore. 

In short, be the gateway for companies to Southeast Asian and global investors, even if that means sharing the spotlight with another exchange. This collaborative approach — rather than insisting on exclusive primary listings — would still boost SGX’s trading volumes and relevance.

Additionally, Singapore’s regulatory quality and innovative market structure should be leveraged, not watered down. The answer to attracting growth companies isn’t to abandon prudence, but to modernize it. The Review Group has rightly suggested moving toward a more disclosure-based regime and easing pre-profit listing rules for select sectors. These are sensible tweaks that align with global best practices (Hong Kong did similar for biotech). Implementing them will remove some hurdles for worthy companies. 

But critically, Singapore must uphold its reputation for corporate governance and investor protection — one of its key selling points versus other emerging markets. Doubling down on governance doesn’t mean onerous bureaucracy; it means ensuring that the companies that do list in SGX are solid, transparent and investor-friendly. The S-chips saga taught painful lessons about vetting foreign issuers. Today, SGX can differentiate by saying: we might not have the most IPOs, but the ones we have are quality. For investors tired of scandals in other markets, that assurance counts for a lot.

Finally, Singapore should focus on liquidity and market depth for the stocks it already has. This is something SGX has been attempting — for example, reducing lot sizes, introducing market makers, and developing indices and derivatives to generate trading interest. These efforts should continue and intensify. Rather than spending public funds to seed external fund managers (the S$5 billion EQDP) with the hope they drum up trading,​ the exchange could invest in technology, trading platforms, and partnerships that make it easier and cheaper for anyone around the region to trade Singapore stocks. If every Southeast Asian investor could access SGX as easily as their local exchange — via trading apps, perhaps with unified settlement — it would organically broaden the investor base. 

In this regard, regional integration efforts (like past ASEAN trading links, or new bilateral partnerships) might bear more fruit than funneling money through select funds. The goal should be to make participation in Singapore’s market frictionless and attractive for those who want to invest, rather than forcing the hand of those who don’t.

Quality over quantity, always

Today, Singapore’s equity market must reckon with a tough truth: you can’t legislate investor enthusiasm. The government can tweak taxes, dangle residency status, or even inject capital through MAS, but none of it will create a vibrant market unless real investors believe they can earn solid returns. Right now, that belief isn’t there — and strong-arming stakeholders will not foster it. Instead of trying to artificially inflate the IPO pipeline with reluctant participants, Singapore should refocus on cultivating the conditions for success: groom high-quality companies (even if fewer in number) that are ready and worthy of listing, enhance the market ecosystem around them, and leverage niches where Singapore is genuinely competitive.

The irony is that Singapore’s strengths are substantial; they just lie in areas that require patience and strategic vision rather than quick fixes. By playing to those strengths — from REITs and yield plays to being a trusted secondary listing venue and a paragon of governance — SGX can slowly but surely rebuild its equity market’s appeal. This is a longer game, admittedly, and it might not satisfy the urge for an immediate headline-grabbing IPO boom. But it promises a more sustainable, self-sustaining growth. 

In contrast, the current approach of pressuring investors into IPOs they’d otherwise sidestep could backfire, or at best yield a temporary blip in activity without long-term vitality.

Singapore’s business community and policymakers alike should remember that financial hubs are built on trust and mutual benefit. Investors, whether foreign family offices or local institutions, must feel that the market works for them — that they are not just cogs in a centrally planned capital allocation scheme. Right now, policies seem to imply investors must be prodded for their own good. A better message would be: invest here because you want to, because Singapore offers opportunities you can’t find elsewhere. 

To deliver that message convincingly, Singapore must embrace quality over quantity. Let the other hubs chase listing league tables; Singapore can carve a different path, one that amplifies what it already excels at. In the long run, a few flagship successes — IPOs that soar, companies that thrive post-listing, investors who profit handsomely — will do far more to draw capital to SGX than any package of forced incentives ever could.

In sum, stop grasping at straws and start building on bedrock. Singapore’s stock market revival will come not from forcing the issue, but from earning back the confidence of investors — one solid listing at a time. That means creating an environment where the incentives naturally align: where companies list because they see value in Singapore, and investors buy in because they see value in the companies. Anything less is, indeed, a straw man.