Singapore stock market poised for growth as more firms explore SGX listings amid shifting global conditions

SINGAPORE: Singapore’s stock market is showing renewed momentum, supported by easing interest-rate expectations, stronger regional demand for capital and a growing pipeline of companies looking to list on the Singapore Exchange (SGX).

Analysts say enquiries for initial public offerings (IPOs) have picked up markedly, as firms seek stable and trusted markets amid shifting global economic conditions.

Singapore emerged as Southeast Asia’s largest IPO market by proceeds last year, with nine deals raising about US$1.6 billion (S$2.1 billion), according to a report by professional services firm Deloitte last November.

This marked a sharp turnaround from 2024, when only four IPOs raised US$34 million. 

STABLE, TRUSTED MARKET

Industry observers attribute the rebound largely to Singapore’s reputation for political stability, regulatory clarity and economic resilience.

Mr Chan Yew Kiang, ASEAN and Singapore IPO leader at business services firm EY, believes last year was the start of “renewed interest” in the Singapore equity market.

He said: “A large part has to do with Singapore (being) very stable, whether it’s politically or economically, and from a regulatory perspective. As long as we maintain the right balance, we will continue to attract interest from companies in Asia Pacific and internationally.”

That interest is already translating into a busier IPO pipeline.

Mr Chan said he now receives one to two IPO enquiries every other week, compared with roughly the same number over an entire year in the past.

“Companies these days need capital to grow, and they need to grow fast just to be able to compete … and the IPO remains a very strong source of funds for such companies who have got big growth plans,” he added.

Regional firms are increasingly eyeing Singapore as they expand supply chains and seek access to new markets, he noted.

“Singapore is actually quite an ideal destination for other Asian companies. (They're using) Singapore as a base to reach out to the ASEAN and even the international markets,” he added.

“So, we expect more interest coming from retail, industrial and even some technology companies.”

Looking ahead, market watchers highlighted several potential tailwinds.

For instance, the United States Federal Reserve is widely expected to cut interest rates, a move that could benefit interest-sensitive sectors such as real estate investment trusts (REITs).

Supply chain realignments, increased adoption of artificial intelligence and stronger domestic construction activity could also support broader market growth, even as economic expansion slows.

“We are expecting to see a little bit of a slowdown, down to one to three per cent,” said Mr Geoff Howie, market strategist at SGX Group.

He said that while global growth is expected to slow, much of the economic activity and revenue remains resilient, generating a stable macroeconomic outlook.

Investor sentiment, he noted, remains cautiously optimistic, though greater retail participation is needed.

“We need to focus on initiatives, whether it's their investor relations team communicating more with investors and having more engagement, or whether those companies are also looking to engage some corporate strategists to work out ways to optimise their balance sheets and so forth,” he added. 

BOOSTING SINGAPORE'S STOCK MARKET

Efforts are already underway to improve investor education and market liquidity.

A review group was formed in 2024 to propose measures to strengthen the local stock market, with further details expected this year.

Among the initiatives is a S$5 billion Equity Market Development Programme (EQDP), which involves putting money with fund managers focused on investing in Singapore stocks. These managers are expected to actively manage investments in a range of firms and draw in investments from other investors.

Meanwhile, SGX and US-based Nasdaq have partnered for dual listings, allowing companies to access both markets with a single prospectus.

The exchange is also moving to lower barriers for retail investors. For shares priced above S$10, the minimum board lot size will be reduced from 100 shares to just 10, making it easier for individuals to participate.

Authorities say these moves are part of taking calculated risks.

“We may not always succeed. In fact, some of the ideas that we discussed, when we decided to embark on them, we went in with our eyes open,” said National Development Minister Chee Hong Tat, who is also deputy chairman of the Monetary Authority of Singapore.

“Some may work, some may not work. But we got to try. Because if we don't try, the chances of success are zero. If we try, at least we have a shot at it.”