New committee to oversee launch of new measures to inject more liquidity into SGX

Key Concepts

• SGX (Singapore Exchange): The main stock exchange of Singapore.
• Liquidity: The ease with which an asset can be bought or sold without affecting its price.
• Dual Listing: Listing a company’s shares on two different stock exchanges.
• Fund Managers: Professionals who manage investment funds on behalf of others.
• Turnover: The value of shares traded within a given period.
• Small & Mid-Caps: Companies with smaller market capitalization (total value of outstanding shares).

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Boosting the Singapore Exchange: New Measures and Early Signs of Improvement

The Singapore Exchange (SGX) is undergoing several initiatives designed to improve investor education and increase liquidity, with a new committee established to oversee implementation. Details of the full rollout are anticipated later this year. These efforts respond to the dynamic nature of the stock market and aim to revitalize trading activity.

Financial Injection & Fund Manager Program

A key component of the revitalization plan is a S$5 billion program. This program allocates funds to nine selected fund managers specifically for investment in Singapore stocks. The intention is to directly inject capital into the market and stimulate demand. The selection process for these fund managers was presumably rigorous, aiming to identify those best positioned to drive growth in the SGX.

NASDAQ Dual Listing Bridge

A significant development is the creation of a “dual listing bridge” with the NASDAQ stock exchange in the United States. This allows companies to access both the Singapore and US markets using a single prospectus, streamlining the listing process. This is presented as a mutually beneficial arrangement: companies gain broader access to capital and increased liquidity, while investors benefit from a wider range of investment opportunities, particularly in sectors like fast-growing technology, green energy, and digital services. The simplification of the listing process is expected to attract more companies to the SGX.

Lowering Minimum Share Purchases

To encourage broader participation, SGX is reducing the minimum number of shares investors need to purchase for stocks priced above S$10. This is being lowered from 100 units to just 10 units. This reduction in the barrier to entry aims to make investing more accessible to a wider range of investors, requiring less initial capital.

Calculated Risk & Acceptance of Potential Failure

Authorities acknowledge that these initiatives involve a degree of risk. As stated by an official, “We may not always succeed. In fact, some of the ideas that we discussed when we decide to embark on them, we went with our eyes open. Some may work, some may not work, but we got to try. We got to try because if we don't try, the chance of success is zero. If we try, at least we have a shot at it.” This statement highlights a proactive approach, emphasizing the importance of experimentation and acknowledging that not all initiatives will be successful. The core argument is that inaction carries a greater risk than attempting improvements, even with the possibility of failure.

Positive Early Indicators & Turnover Growth

Despite the inherent risks, early indicators suggest a positive trend. Average daily turnover in the third quarter of the year increased by 16% year-on-year, reaching S$1.53 billion – the highest level since 2021. This demonstrates a tangible increase in trading volume. Furthermore, trading activity in small and mid-cap companies has also shown improvement, indicating broader market participation.

Future Outlook & Continued Monitoring

While these early signs are encouraging, the report notes that it remains to be seen whether this positive momentum will continue into 2026. Continued monitoring and evaluation of the implemented measures will be crucial to assess their long-term effectiveness and make necessary adjustments.