With more companies exiting Singapore’s stock market and dismal Initial Public Offering (IPO) market growth, Singapore is finally taking efforts to boost this sector. Earlier this year, the Monetary Authority of Singapore (MAS) announced a $5 billion injection to boost and develop the Singapore stock market. The goal is to increase the Singapore Exchange’s (SGX) attractiveness to investors and increase trading. One of the ways to achieve this goal is to attract local and regional companies to list in the SGX. Starting with a portion of $1.1 billion, the stock market has already seen an anticipated bull run in recent weeks. Why is this necessary and how does it contribute to Singapore’s economy?
Recent Results From MAS’s Boosts 2025
STI Hits Record Highs Amid Investor Optimism
Singapore’s stock market is riding a wave of optimism in 2025, with the Straits Times Index (STI) recently hitting record numbers and the SGX posting its best annual earnings in 25 years. At the same time, the city-state’s sluggish initial public offering (IPO) market is showing some positive uptick.
The STI reached an all-time closing high of 4,273.05 on 24 July 2025, climbing nearly 37% over the past year. Analysts attribute this rally to a combination of attractive valuations, strong dividend yields, and Singapore’s enduring reputation as a safe investment haven. J.P. Morgan recently upgraded Singapore equities to “overweight”, projecting that the STI could rise further to around 4,200 points in the near term.
SGX Delivers Record Earnings
The bullish sentiment has been mirrored in corporate earnings. SGX reported an adjusted net profit of S$609.5 million and revenue of S$1.3 billion for its latest financial year, marking its highest earnings since 2000. This performance was driven by robust trading across equities, currencies, and commodities, underpinned by supportive government policies and a steady flow of foreign capital.
Role in Singapore’s Economy and Financial Markets
A well-functioning stock market plays a crucial role in Singapore’s economy and GDP growth. By providing companies with a platform to raise capital through equity financing, the SGX supports business expansion, innovation, and job creation – the key drivers of economic output. The stock market also deepens liquidity in the financial system, enabling more efficient allocation of resources.
For the government, a vibrant equity market strengthens Singapore’s fiscal position indirectly, as business growth translates into higher corporate tax receipts and greater economic activity across supporting industries such as banking, legal services, accounting, and financial technology.
On a broader scale, the performance of the SGX has a ripple effect across Singapore’s financial markets. Strong equity activity often boosts related segments such as derivatives trading, private wealth management, and asset management, while also increasing demand for financial products like bonds, ETFs, and REITs.
Strengthening Singapore’s Global Financial Hub Status
The stock market’s health also underpins Singapore’s global standing as a leading financial centre in Asia. Alongside Hong Kong and Tokyo, Singapore is frequently ranked among the top financial hubs in the region. A robust equity market not only attracts foreign direct investment but also encourages multinational corporations to use Singapore as their Asia-Pacific headquarters.
The country’s transparent regulatory framework, political stability, and innovative market infrastructure further enhance its competitiveness, ensuring that global investors see Singapore as a gateway to Southeast Asia’s fast-growing economies.
Challenges on the Global Stage
Despite its domestic resilience, Singapore’s stock market is less dominant on a global platform. In terms of market capitalisation and daily trading volumes, SGX lags far behind major exchanges such as the New York Stock Exchange, Hong Kong Stock Exchange, and Australian Securities Exchange.
This relative underperformance stems from Singapore’s small economic size, its concentration in mature, dividend-focused sectors, and strong competition from other Asian exchanges for high-profile listings. These factors have made it challenging for Singapore to appear among the top-performing stock markets globally, even when the STI posts strong returns.
Opportunities in the Singapore Stock Market
Within these constraints lie unique opportunities. Singapore’s market offers one of the highest dividend yields in Asia, averaging around 5%, thus making it attractive to income-focused investors as global interest rates moderate.
The country’s strong REIT sector, backed by high-quality assets in logistics, data centres, and hospitality, continues to draw long-term investors seeking stable cash flows. Meanwhile, government efforts to attract technology, green energy, and biotech listings could diversify the market’s sector mix and position SGX to benefit from megatrends such as digital transformation and sustainability.
How Investors Can Liven Up the Market and Profit
Analysts say both local and foreign investors can help boost market vibrancy by:
- Supporting IPOs: Participating in new listings, especially in growth sectors, adds liquidity and visibility to the market.
- Broadening sector exposure: Allocating capital to underrepresented industries like tech, biotech, and clean energy can encourage more diverse listings.
- Engaging in secondary market trading: Higher turnover supports price discovery and market depth, making SGX more attractive to global funds.
- Promoting ESG investing: Backing companies with strong environmental, social, and governance credentials can align the market with global investment trends.
By actively engaging in these areas, investors can not only generate returns but also contribute to Singapore’s reputation as a dynamic and forward-looking capital market.
Can Global Investor Programme (GIP) Candidates Participate in the Singapore Stock Market?
Yes, GIP candidates, especially those applying under Option C (Single-Family Office), are required to invest in approved investment categories in Singapore. Among these, equities (including those listed on SGX, such as equities, REITs, or Business Trusts) are one of the investment options.
IPO Market Showing Tentative Recovery
While the secondary market is thriving, the primary market has only just begun to show signs of recovery. In 2024, Singapore saw just four IPOs, all on the SGX Catalist platform, raising a combined US$30 million and making it the smallest IPO tally in Southeast Asia that year.
This year, a key milestone came in July with the listing of NTT DC REIT, a global data centre trust backed by Japan’s NTT Group, which raised US$773 million. It was Singapore’s largest IPO since 2021. The SGX is now tracking more than 30 companies preparing to list, with some offerings projected to raise between S$600 million and S$1 billion.
Measured Optimism for 2025 and Beyond
The market’s trajectory is one of measured optimism due to MAS’s support and fund injection. Whether the IPO revival gains momentum will depend on the success of early entrants and the ability of new listings to sustain investor confidence.
What is clear is that Singapore is doubling down on its ambition to be a leading capital market in Asia. With the secondary market performing strongly, the IPO pipeline building, and the stock exchange playing a pivotal role in the broader economy, 2025 may mark the start of a more vibrant era for the SGX – one that strengthens both the nation’s GDP and its status as a premier financial hub, while unlocking new opportunities for investors at home and abroad.
