New economic measures to boost Singapore’s equity market liquidity: analyst

These initiatives also demonstrate strong political commitment to enhancing Singapore’s position as a leading global financial hub.

The newly introduced economic measures are expected to act as re-rating catalysts that will boost market sentiment, trading liquidity, and valuations in Singapore's equity market, according to Morgan Stanley.

In its report, Morgan Stanley said these initiatives also demonstrate strong political commitment to enhancing Singapore’s position as a leading global financial hub.

A major insight is the potential for the $5b liquidity injection to crowd in more private capital. This substantial injection is likely to drive billions of dollars in incremental capital flows annually, further strengthening market confidence.

Additionally, the growth of family offices, averaging 400 new single-family offices annually since 2020, is poised to create a ripple effect, further amplifying capital inflows into Singapore’s equity market and expanding its investor base.

The firm said the measures are expected to kick-start a virtuous cycle of improved trading liquidity, fairer valuation multiples, and enhanced capital formation.

Broader market participation is another key outcome, as enhanced liquidity and more stable valuations are likely to draw a wider range of investors. This diversification would contribute to a more resilient and dynamic market ecosystem.

Looking ahead, the Monetary Authority of Singapore is set to unveil additional measures by the end of the year. These forthcoming initiatives signal an ongoing commitment to strengthening the equity market and ensuring its continued appeal to both domestic and international investors.