SGX seeks greater sector diversity in IPOs; aims to attract more AI firms

[SINGAPORE] The Singapore Exchange (SGX) is seeing an uptick in initial public offerings (IPOs), but its head of equities, Ng Yao Loong, has flagged a lack of sectoral diversity among new listings.He was speaking at an investment conference organised by the Investment Management Association of Singapore (IMAS), which is the national representative body of investment managers.Ng pointed to UltraGreen.ai’s listing as a good example of what the bourse is seeking. The health-tech firm debuted on the SGX mainboard last December in a US$400 million IPO – the largest non-real estate investment trust listing in Singapore since 2017.“We need a better balance of different companies, and ideally companies that represent the microcosm of local and regional economies,” he said during a panel.Ng’s comments come amid news of aerospace and artificial intelligence (AI) firm SpaceX’s upcoming record listing, which could kick off a wave of large AI IPOs.He also noted that the National Space Agency of Singapore is set to launch, potentially opening up new sectors, but emphasised that significant work remains.Ng added that an IPO is only the start of a company’s journey. Multiple elements must be in place for a listing to succeed, including attracting a diverse investor base and building momentum for other companies to view SGX as a viable venue for capital formation.Another key factor is the diversity of market participation, said fellow panellist Pauline Ng, head of Asean and EMAP equities at JP Morgan Asset Management (JPMAM) – a newly appointed manager under the Monetary Authority of Singapore’s (MAS) S$6.5 billion Equity Market Development Programme (EQDP).She highlighted that retail participation in Singapore remains relatively low compared with markets such as Taiwan and South Korea, where retail investors account for a significantly larger share of trading activity.A wider mix of participants, she explained, contributes to market vibrancy.“You want people to take different views of investments, understand and participate in the growth – these are all the building blocks,” said JPMAM’s Ng.Short of a renaissance?Panellist Gillian Tan, assistant managing director (development and international) at MAS, noted that Singapore’s equity market transformation can be compared to the Italian Renaissance, driven by three core forces: institutions, ideas and capital. These pillars also form the foundation of the MAS equities market review.She highlighted that Singapore already has many of the core ingredients of a strong ecosystem, including a deep institutional investor base, an integrated financial system, and a well-developed asset management industry overseeing more than US$6 trillion in assets. These factors provide substantial infrastructural and institutional strength.However, better integration across the ecosystem is needed – linking private capital, enterprise development and innovation with the public markets.“What we hope to see long term, before we can declare victory on this, is much stronger trading liquidity, a deeper pipeline of listings and overall broader investor participation,” said Tan, while acknowledging that the market is still far from a full renaissance.She noted that some past measures had been helpful but insufficient, and that a holistic approach was required – improving liquidity, research coverage, listing pathways, connectivity and processes.To address these gaps, MAS introduced a S$30 million Value Unlock programme and the S$6.5 billion EQDP initiative, placing seed capital with asset managers to catalyse the market. So far, close to S$4 billion has been allocated across nine managers.Tan said EQDP received over 100 indications of interest from fund managers at launch, with diversity a key consideration.“We wanted to pick diverse strategies and with our nine managers, we are seeing that diversity,” she added.Yield also remains a crucial foundation for the market, particularly amid ongoing geopolitical uncertainty, noted JPMAM’s Ng.Her firm’s discussions with potential investors, distributors and market participants as part of EQDP highlighted that sustainable income is a critical building block for long-term investment. This is further supported by Singapore’s strong currency and fortress-like balance sheet.She added: “As investors, we don’t like to choose between yield or growth…we want to have growth because we are very greedy people. We want to invest in companies that are able to demonstrate a sustainable growth path, very disciplined capital allocation and focused on total shareholder returns.”With geopolitical uncertainty becoming the new baseline, panellists stressed that public markets should be viewed as a platform for long-term growth rather than as a tool to time the market.“Long term value, governance (and) sustainable growth across cycles – that is the growth that we want to support and hope we will see,” said Tan.In line with this perspective, SGX’s Ng noted that while Singapore has performed well, other jurisdictions have also seen success, highlighting the need to keep improving.“Value creation is going to be the compounding of many actions well executed, so that’s where we are headed,” he added.