It will take a village to lift our stock market

RECENTLY, there have been articles, letters and much discussion lamenting a relatively weak local equity market performance, especially when compared to the US and Japanese markets which have been on a run since 2023.

A variety of observations and solutions have been proposed, including listing large companies such as government-linked crown jewels such as PSA; more active participation and involvement of sovereign wealth funds; strengthening the capabilities of board directors; improving governance; as well as specific regulations emulating the “Japan” model.

Other suggestions include “corporate value-up” programmes, formation of joint task forces and asking listed company management and board directors to address undervaluation.

Contributors to the discussion have included members of the public, journalists and representatives of associations such as Securities Investors Association (Singapore) and The Society of Remisiers, amongst others.

Not surprisingly, we have stopped comparing our markets to Hong Kong and China of late, given the relative outperformance of the Straits Times Index since the pandemic hit in 2020.

Meanwhile, our neighbours in Asean have had a better recent track record in initial public offerings and domestic liquidity. This is due to a home-biased investment preference in each of our neighbours, supported by their sovereign and pension funds, captive domestic institutions and a larger retail investor base, as compared to our local investors’ promiscuity for shiny objects overseas.

The topic is complex and there are many stakeholders. It takes a village, so it is said. One of the stakeholders in this discussion are the listed companies themselves.

Improving investor relations

This is where SGListCos comes in, as the association for all Singapore Exchange-listed companies on both the Mainboard and Catalist. The objectives of this association cover thought leadership and advocacy, ESG (environmental, social, and governance), as well as corporate access and investor relations (IR).

SGListCos’ members include listed blue chips, large caps and small-mid caps from both Singapore and overseas. When it comes to share price and liquidity, the interests of a listed company and shareholders are aligned. All parties want fair valuation and more trading. The question is how to achieve this.

As corporate access and IR are among the objectives of the association, SGListCos has been exploring improving investor relations capability as part of the solution. Investor confidence, and ipso facto, liquidity, can be boosted by accurate and timely updates, access to management, and understanding the strategy and context of a company’s decisions.

However, it is evident that the IR skillset is short in supply in the Singapore market, and more companies – big and small – do need to improve capabilities and focus in this area.

SGListCos has initiated discussions with The Institute of Banking and Finance in Singapore with the intent of developing accredited courses for IR professional development, to improve skillsets and make it easier for newcomers to IR to learn the ropes. We hope that this will materialise later this year.

Subsequently, for experienced IR practitioners, we are developing masterclasses to cover case studies and best practices.

SGListCos has also formed an Asian Alliance for IR together with Taiwan Investor Relations Institute and Hong Kong Investor Relations Association. With a broad listed company universe covering Hong Kong, Singapore and Taiwan, the Asian Alliance for IR will enable sharing of best practices from across these major Asian markets, and, hopefully, capital flows as well.

New segments of shareholders

Critical to boosting liquidity is also the ability to engage and bring in new segments of shareholders together with the sell-side, who also need to devote resources to cover listed companies who have a story to tell.

Therefore, SGListCos has organised a series of events with the objective of engaging and collaborating with diverse stakeholders, starting with outreach to investors across the Causeway together with CGS international, CIMB Malaysia, RHB Bank and Kenanga. Upcoming events include working with financial influencers to reach a digital retail audience.

Of immediate focus is the growth of up to 1,400 family offices since the pandemic. This segment now has a minimum capital deployment requirement of the lesser of S$10 million or 10 per cent of assets under management to be invested into the Singapore capital markets across equity, debt and funds.

To facilitate more investment in the local market, SGListCos has hosted networking events to bridge the gap between listed company C-suite and family offices to expand their breadth of participation beyond big caps and real estate investment trusts to a wider range of small and mid-cap stocks.

It is our collective interest and desire to have a vibrant stock market that provides equity capital for growth to support and reward aspiring entrepreneurs, and to create local, regional or even global champions.

This can be engendered if our domestic savings can be more consistently funnelled into our local market directly by ourselves, or indirectly through and by our institutions which manage over US$3 trillion in Singapore.

We are encouraged by the spirit behind these discussions to drive better outcomes for our local market. We are hopeful that the talk will be matched by the walk. We will succeed if all of us collectively play our respective parts well. As SGListcos and our members step up our efforts, we seek the support of all stakeholders.

The writer is pro-tem chairman of SGListCos