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Introduction
1) Good afternoon to our Guest-of-Honour, Mr. Ravi Menon, Managing Director of the Monetary Authority of Singapore and to all our guests – a warm welcome and thank you for joining us today. It is a busy week with many events, so we are grateful for your presence.
2) Several years ago, I shared my views in a commentary on how it was an ambitious but achievable task for Singapore to be a global technology hub, if all the wheels in the ecosystem were set in motion. Singapore has many things going for us and we are all part of the blueprint of success.
3) Hence, it was with great excitement when we announced in September the interagency initiatives to strengthen financing in Singapore’s capital markets. That was a significant milestone, as we – to quote Minister Gan again – set to blow new wind into the sails of our public equity market.
Our new economy landscape
4) I believe the wheels have now been set in motion.
5) For a start, the new economy is not just about tech companies. Global economies are being transformed and renewed in the wake of the pandemic. We are all familiar with the fundamental shifts – rapid digitalisation, adoption of e-commerce and increased focus on ESG, just to name a few.
6) The difference between these fundamental trends and economic and business cycles is that the impact of these trends are universal and long-lasting. Companies today – whether they are century-old financial institutions or five-year-old start-ups – have to build their businesses with a new-economy lens and capitalise on the trends that will shape tomorrow.
7) Singapore and SGX are in a sweet spot. We are home to many established listed companies which have successfully transformed their businesses. SGX has welcomed new companies with forward-looking business models. Singapore is also a leading start-up hub with many homegrown successes.
8) As a wealth management hub, with the region’s most international stock market, Singapore offers sophisticated investors who like the stability of our marketplace and recognise the upside potential of SGX-listed companies.
9) Investors also have a greater appreciation of new economy companies, beyond just the FAANG stocks. Nanofilm, a leading provider of nanotechnology solutions in Asia, is an example. Investors were enthused with Nanofilm when it went public last year, as reflected in the company’s stock multiples.
Capital raising that is fit for purpose
10) A key differentiating factor for Singapore’s capital markets in this new economy is undoubtedly our unique ability to bring together a deeply supportive and collaborative ecosystem. The joint interagency initiatives were made possible by close engagement and constant dialogue with multiple stakeholders.
11) The initiatives are proof that Singapore has one of the most supportive ecosystems, where there is an unprecedented level of collaboration and shared purpose among public and private sectors.
12) This ecosystem is the bedrock of Singapore’s capital markets and is the foundation that will ensure the long-term success of our market participants and investors.
13) As companies evolve, so does the way in which they raise capital. To ensure our marketplace remains fit for purpose in the new economy, we must continuously improve and broaden our products and services, and be bold when the opportunity calls for it.
14) The introduction of the SPAC framework is an example of how we heard the needs of the market, consulted many stakeholders, and calibrated a framework that we believe balances both business needs and investor protection.
15) In fact, the SPAC public consultation received the highest number of responses ever, and we introduced the framework in record time – thanks to the support of our ecosystem.
16) That said, we do not believe that SPACs will replace traditional IPOs. Our goal is to broaden the avenues of fundraising.
17) Companies need a platform for their capital needs at every stage of their growth – a platform that bridges private and public markets, and a platform that they can continually tap to raise funds after IPO. On average, SGX-listed companies raise four times more funds through the secondary market than at IPO.
18) We believe the interagency efforts will catalyse new listings, and lead to outcomes that are greater than the sum of its parts.
Ecosystems within the ecosystem
19) Finally, as we strengthen our overall capital market ecosystem, we will also cultivate new ecosystems alongside our new economy companies.
20) Take the example of our REIT market, the largest in Asia ex-Japan. Since we pioneered it in 2000, we have built a stable ecosystem of market participants and the market capitalisation of this sector grows more than 10% annually.
21) This has not only contributed to a regular stream of REIT listings but has also led to the development of REIT-related products like indices, ETFs and futures.
22) We will very soon welcome two more REIT ETFs on SGX. REIT ETFs is one of the fastest growing asset classes in our ETF market. We also pioneered Asia’s first international REIT futures and the world’s first ESG REIT derivatives, offering more investment and risk management options.
23) Moving forward, another ecosystem that we are actively building is in sustainability.
24) We can, and will, play a bigger role in moving to a net-zero future. I had the privilege to attend COP26 and engage industry leaders on how we can finance a climate transition. To quote Mark Carney – “Stock exchanges are critical market infrastructure that are essential for investors to manage the risks and seize the opportunities in the climate transition.” I hope to share more on our progress in this area in the coming months.
Closing remarks
25) In closing, let me reiterate what I said in my commentary before – which is that greater support will create a home-field effect, and lead to more wins for all. Indeed, when everyone is committed to the same end goal, our ambitions can become reality.
26) Thank you all for your support in our capital markets. I hope this will be the first of many capital markets symposium that we will be hosting. Our deep appreciation to our speakers, CNBC for moderating our panels, and to all who have made this event possible. Thank you.
