Singapore's Equity Market Faces Challenges

Former DBS chief executive Piyush Gupta has raised an urgent call for Singapore to innovate its approach in the equity market, stressing the need to regain its competitive edge over regional rivals. Instead of merely playing catch-up, Gupta advocates for a radical rethinking of market practices, harnessing advanced technologies to leapfrog competitors.

Technology as a Game Changer

Gupta highlighted that Singapore is lagging behind other ASEAN nations, suggesting that technological advancements like blockchain and tokenization could propel the market forward. He pointed out that traditional methods are no longer sufficient, stating, "We shouldn’t just focus on catching up; we should redefine how this can be done."

Current Challenges in the Market

Investors have expressed concern about Singapore's equity market due to lower valuations and limited growth prospects compared to larger markets. The high cost of listing and stringent compliance requirements have further complicated matters. Although initiatives like the Monetary Authority of Singapore's (MAS) $5 billion Equity Market Development Programme (EQDP) are in place, Gupta voiced skepticism about their long-term effectiveness.

Unlocking Potential with Blockchain and Smart Contracts

Drawing from his extensive experience in banking, Gupta suggested that distributed ledger technology (DLT) could revolutionize compliance and oversight in capital markets. By using smart contracts, regulatory bodies could gain real-time insights, enabling faster and more accurate reporting and governance.

The Shifting Landscape of IPOs

Gerald Singham, Dentons’ global vice-chair and ASEAN chief executive, noted that companies are taking longer to go public, prompting some to choose private routes to sidestep regulatory scrutiny. This shift poses challenges for traditional stock exchanges like Singapore Exchange (SGX), which now must focus on innovation, global relevance, and strategic partnerships to revitalize their market presence.

A Glimpse of Hope: Positive Market Trends

While challenges persist, SGX’s senior managing director Pol de Win expresses optimism due to an influx of well-positioned companies and a surge in the Straits Times Index, which recently reached a record high driven by DBS Bank. De Win emphasized that enhancing liquidity and maintaining investor focus across various market segments are vital for healthy price formation.

Looking Ahead: The Future of Singapore's Equity Market

As Singapore navigates a rapidly changing financial landscape, industry leaders urge a unified approach to ensure its relevance in global capital markets. With regulatory frameworks adapting to maintain competitiveness and a growing number of new listings on SGX, there is cautious optimism that Singapore can once again become a dominant player in the region’s equity markets.