At the Singapore Exchange Capital Markets Symposium, Mr Ravi Menon, Managing Director, MAS, highlighted that Singapore is well poised to become one of the leading fund-raising centres in Asia. Mr Menon outlined four key dimensions to Singapore’s value proposition: a vibrant ecosystem for private equity and venture capital; the premier Asian hub for solutions in investment risk management; a rapidly growing debt capital market; and a promising equity capital market.
Speech by Mr Gan Kim Yong, Minister for Trade and Industry, at the SGX Securities Market Open Event on 17 September 2021
Ladies and gentlemen,
1. Good morning to all of you. I am very pleased to be here with you today at the SGX Securities Market Open.
Singapore’s innovation ecosystem
2. The Singapore economy has undergone tremendous transformation since the early days of our nation building. When we first became independent, we needed to build labour-intensive industries to provide jobs for Singaporeans. In the 1980s, we built up our manufacturing sector to establish a modern industrial economy. In the 1990s and 2000s, we developed the IT, bio-pharma and financial sectors as we transformed into a knowledge-based economy.
3. As we approach the frontiers of economic development, innovation will be a key growth engine – in traditional companies and increasingly in start-ups. Over the past two decades, the Government invested heavily in building up a vibrant ecosystem that supports innovative startups, enabling them to scale up and expand to global markets. Our support ranges from seed investments, grants and loans, to incubator and accelerator programmes.
4. We are seeing the fruits of these efforts. More and more home-grown companies are doing well on the global stage, including Secretlab, Ninja Van and MiRXES. In 2021, four local startups have been valued as unicorns, with valuations of at least $1 billion USD – these are PatSnap, Carro, Nium, and most recently, Carousell.
Building a vibrant public equity market
5. As more of our startups and companies grow and mature, we must ensure that they have continued access to a range of financing options to support their expansion plans.
a. We already have a strong ecosystem for early and growth stage investments. In the first half of this year, tech startups in Singapore raised S$5.3 billion worth of investments from venture capital and private equity firms. The Government has several funds such as SEEDS Capital and EDBI to help catalyse these private sector investments.
b. Singapore is also the leading debt capital market in Asia.
c. But we have heard repeatedly that one area where Singapore can do better is in making our public equity market more conducive for innovative growth companies. As more of our start-ups mature into regional and global companies, having a vibrant home equity market becomes more pertinent.
6. Today, SGX operates one of the most well-regulated and liquid stock markets in Asia. SGX is especially strong in income-generating assets like real estate investment trusts (REITs). When investors in Asia think about REITs as an investment class, they immediately think of Singapore and SGX, because we have the right ecosystem that allows for a liquid and growing market, and SGX has the most international REITs platform in the region.
7. Over the last 5 years, SGX has strengthened its appeal to innovative growth companies, carefully balancing the interests of both investors and companies. For example, SGX abolished mandatory quarterly reporting in favour of a new risk-based reporting regime last year, and has also been working to increase the number of market makers and liquidity providers present on the exchange. Earlier this month, SGX also announced new rules that enable Special Purpose Acquisition Companies (SPACs) to list on the SGX Mainboard.
8. In the coming years, many Singaporean and Asian companies in high-growth, high-tech sectors will come of age, and seek to list on public markets. We should strive to anchor these companies in Singapore. To do this, we will make a concerted push to establish Singapore as the listing destination of choice for local and global market leaders, especially from high-growth and high-tech sectors.
Initiatives to strengthen our public equity market
9. I am happy to announce that the Government, Temasek and SGX will launch four new initiatives toward this goal.
10. First, the Government and Temasek will co-invest in a new fund, known as “Anchor Fund @ 65”, starting with S$1.5 billion of capital in the first tranche.
b. It will be managed on a commercial basis by 65 Equity Partners, a new, wholly-owned investment platform of Temasek. 65 Equity Partners will also manage the $1 billion “Local Enterprises Fund @ 65”, which was announced at Budget this year to help large local enterprises (LLEs) transform, expand and scale.
c. Both Anchor Fund @ 65 and Local Enterprises Fund @ 65 will have access to Temasek’s strong network and deep expertise. The funds will be well-positioned to help portfolio companies grow and flourish from founding to listing.
11. Second, EDBI, the dedicated investment arm of EDB, intends to establish a new “Growth IPO Fund” to invest in future market leaders and technology innovators that are two to five years away from a public listing.
a. Starting with a fund size of up to S$500 million, EDBI will invest in growth stage companies at earlier stages of development, and partner with them to grow their operations and anchor key capabilities in Singapore, with a view towards an SGX listing.
b. This is in line with EDBI’s strategic objective to anchor high-growth companies and investors in Singapore to grow our future economic pillars.
12. The third initiative we are announcing today is MAS’ enhancement of its Grant for Equity Market Singapore (GEMS) scheme, which will provide additional support for listings in Singapore.
a. The GEMS listing grant, which helps to defray listing costs, will have its cap increased from $1 million to $2 million. This will better support listings of unicorn companies in Singapore. The grant will also be expanded to support listings by SPACs.
b. Having a strong ecosystem of research analysts to facilitate price discovery and trading liquidity is also a critical success factor for our public equity market. MAS is therefore expanding the GEMS research talent development grant to co-fund hiring costs for two years, up from the earlier cap of one year.
13. Finally, SGX will also work alongside companies to provide bespoke capital market solutions, customised to support the unique needs of each company. These range from private fundraising to enhancing liquidity and profile-building. For example, SGX’s enhanced liquidity provider programme comprising over 40 market makers and active traders will support partner companies with continuous quotations.
14. We know that the initiatives we are launching today are no magic bullet. But we believe they will blow new wind into the sails of our public equity market, and make SGX not just a viable but a compelling option for innovative growth companies seeking a public listing.
15. Ultimately, we are not doing this just for the sake of having high valuations or market cap. It is to give the most promising startups and entrepreneurs from Singapore and across the region another engine of growth, and to allow them to stay rooted here as they ride the wave of opportunity globally. I am confident Singapore has what it takes to become a listing destination of choice for these companies. We have moved mountains to establish ourselves as a global financial and business hub, and will spare no effort to achieve our ambitions for our economy and our people.
16. Thank you.