Investments from GIC ‘not the solution’ to shake up Singapore’s stock market: Chee Hong Tat

SINGAPORE: Directing Singapore sovereign wealth fund GIC to put money into locally-listed corporations is “no longer the solution” to enhance the attractiveness of the native equity market, acknowledged Transport Minister Chee Hong Tat on Tuesday (Jul 2).

“Doing so will compromise our targets of constructing GIC, which is no longer priceless for Singapore and Singaporeans,” he acknowledged, adding that the government would proceed to witness more “sustainable” approaches.

Mr Chee, who can also be 2d Minister for Finance, used to be responding to a parliamentary quiz from Member of Parliament Liang Eng Hwa (PAP-Bukit Panjang) on whether the government would abet in thoughts an offer from some industry gamers for GIC to allocate section of its investments to securities listed on the Singapore Substitute (SGX).

GIC – one of the most three investment entities managing Singapore’s reserves – is the government’s fund manager. It doesn’t be pleased the assets it manages and as a rule, it doesn’t put money into Singapore.

The advice that GIC may perchance perchance restful develop its portfolio to encompass the Singapore market gained traction after a most stylish document by the Monetary Times.

The document on Might perchance perchance perchance perchance furthermore 5 acknowledged the SGX and assorted govt companies are studying proposals from a mission and personal capital association that encompass allowing pension and sovereign money to be invested in the stock market.

Here’s no longer the first time that this has been mooted. The Singapore Commerce Federation proposed having GIC spend Central Provident Fund (CPF) monies to put money into the Singapore stock market as early as 2016.

Earlier this 365 days, the Society of Remisiers (Singapore) also made a identical advice as a approach to shake up the struggling native stock market, which has seen subdued shopping and selling volumes and delistings incessantly outnumbering listings.

Closing 365 days, as an illustration, there were 25 delistings and proper six preliminary public choices (IPOs).

This contrasts with the SGX’s regional peers. In 2023, there were 79 IPOs in the Indonesia Stock Substitute, whereas bourses in Malaysia and Thailand welcomed 32 and 40 listings, respectively, in step with a document by Deloitte.

So much of Singapore corporations fill also opted to list out of the country in most stylish years, comparable to property tech agency Ohmyhome, which made its debut on the Nasdaq last 365 days. More no longer too lengthy ago, cancer diagnostics agency Mirxes refiled its draft prospectus in Might perchance perchance perchance perchance furthermore for an IPO in Hong Kong.

“SHOULD NOT DIRECT OR INTERFERE” WITH GIC’S INVESTMENT DECISIONS: CHEE

In his acknowledge, Mr Chee acknowledged GIC’s mandate is to abet and enhance the arena procuring energy of Singapore’s reserves, especially for crisis desires.

This methodology that GIC’s investment choices need to “aim to make right lengthy-term returns for Singapore”.

“GIC need to, subsequently, proceed to rep genuine investment choices, and the government may perchance perchance restful no longer converse or interfere with GIC’s investment choices,” acknowledged the minister.

He added that under recent arrangements, the sovereign wealth fund can “put money into acceptable Singapore corporations if these corporations fill a world footprint and generate right returns for GIC’s portfolio”.

A “more sustainable procedure” to rep the native equity market is to groom and rep a pipeline of right corporations to list on the SGX, Mr Chee acknowledged.

One initiative is by procedure of establishing funds, comparable to the Anchor Fund @ 65 launched in 2022, that beef up boost enterprises and put collectively them for IPOs in Singapore.

“These funds fill invested in nine corporations up to now and they’re working closely with the portfolio corporations to situation up them for IPO on the SGX,” acknowledged Mr Chee.

The governmentalso has varied schemes in situation to support more SGX-listed corporations develop out of the country and critically change more shining to world investors.

“The governmentremains beginning to novel suggestions and measures to enhance our equity market and beef up alternate boost. We can proceed to work with industry stakeholders on this aim,” Mr Chee urged the House.