Singapore risks losing capital market value chain, SGX chairman warns

The chairman called for an ambitious and broad vision” for Singapore’s capital market.

Singapore Exchange (SGX) chairman has cautioned that without a bold, broad vision for the country’s capital markets, Singapore risks losing the entire value chain of its financial ecosystem to other jurisdictions.

In a letter to shareholders included in SGX's latest annual report, chairman Koh Boon Hwee said a successful capital market is a “national asset” that creates jobs and wealth, helps companies scale and secures the country’s global position.

He drew a parallel with the government’s push for research and development, which helped lift Singapore’s per-capita GDP from under US$14k ($17.91k) to over US$90k ($115.13k) in three decades.

The chairman noted that nearly 14,000 start-ups in Southeast Asia are backed by venture capital. Whilst most may not succeed, hundreds are expected to mature and return capital to investors. Some may list on major global exchanges, but many will need alternative venues.

A vibrant market, he said, must support not just unicorns but also smaller, promising firms and provide liquidity and fair valuations.

He warned that there is now a gap in Singapore’s capital market, as trade sales alone cannot recycle enough capital to sustain the region’s VC ecosystem.

“If our best companies choose to list overseas, the implications go far beyond SGX Group. Over time, the entire value chain — investment bankers, corporate, lawyers, accountants — will shift to jurisdictions where the action is,” Koh said.