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Singapore’s stock market is gasping for air. In the first half of 2024, only one company chose to list on the Singapore Exchange (SGX), raising a mere US$20 million (SGD 26.6 million).
This dismal performance placed Singapore at the bottom of Southeast Asia’s IPO rankings, trailing behind Malaysia’s 21 listings and Thailand’s 17 during the same period.
For a financial hub that once hosted blockbuster listings like NetLink NBN Trust’s US$1.7 billion (SGD 2.26 billion) debut in 2017, this drought raises urgent questions. Why are companies snubbing SGX, and what does this mean for Singapore’s future as a global financial centre?
This article unveils the drivers behind the IPO exodus, analyses SGX’s revitalisation efforts, and offers actionable insights for investors navigating this shifting landscape.
The Current State of SGX IPOs:
Deteriorating Performance
The number of IPOs decreased steadily, starting at 10 in 2020 and falling to 4 by 2024. Funds raised also saw a significant drop, from an estimated $500 million (SGD 665 million) in 2020 to just $30 million (SGD 39.9 million) in 2024, highlighting the shrinking scale of new listings.
Note: Based on USD 1 = SGD 1.33 (February 24th, 2025)
| Year | Number of IPOs | Funds Raised (in USD/SGD million) |
|---|---|---|
| 2020 | 10 | 500 (665) |
| 2021 | 8 | 400 (532) |
| 2022 | 6 | 300 (399) |
| 2023 | 6 | 200 (266) |
| 2024 | 4 | 30 (39.9) |
Impact and Challenges
This decline is attributed to factors such as poor market liquidity, low valuations, and companies preferring overseas markets like the US for better opportunities. The focus on smaller listings, especially on the Catalist platform, with no Mainboard IPOs in 2024, underscores the shift in listing preferences.
A Shrinking Pipeline
SGX’s IPO market has been deteriorating for years. In 2024, just four listings raised US$31.4 million (SGD 41.8 million)—a 98% drop from 2017’s peak.
By comparison, Bursa Malaysia attracted 55 IPOs raising US$1.5 billion (SGD 1.995 billion), while Indonesia’s exchange secured US$900 million (SGD 1.197 billion) from 41 listings.
Even more telling, SGX’s total listed companies plummeted 20% over five years, from 782 in 2020 to 622 by January 2025. Of these, 8% are suspended, and only 43% of Catalist-listed firms are profitable.
The exchange’s struggles reflect broader regional headwinds. Southeast Asia’s IPO proceeds collapsed by 53% year-on-year in 1H2024, with no blockbuster listings exceeding US$200 million (SGD 266 million).
Yet SGX’s underperformance is starkest: its 2024 IPO proceeds represented just 2% of Malaysia’s total and 3.5% of Indonesia’s.
Case Studies: The Allure of Overseas Listings
High-profile companies increasingly bypass SGX. Chinese electric vehicle maker NIO, for instance, opted for a secondary listing in Singapore in 2022 without raising capital, prioritising access to global investors over local liquidity.
Similarly, tech unicorns like ride-hailing apps have favoured New York’s deeper pools of institutional capital.
Even homegrown success stories hesitate: cancer treatment provider Singapore Institute of Advanced Medicine’s 2024 IPO raised just US$20 million (SGD 26.6 million)—a fraction of what it might have secured abroad.
Key Factors Driving the IPO Drought
1) Liquidity and Valuation Concerns
SGX’s thin trading volumes deter listings. In FY2024, total traded value slipped 4.2% to US$ 198.7 billion (SGD 263.7 billion), with daily averages lagging behind Hong Kong and New York.
Lower liquidity suppresses valuations. SGX-listed firms trade at average price-to-earnings ratios of 12–15x, versus 20–25x on Nasdaq.
As Ravi Menon of the Monetary Authority of Singapore (MAS) admits, “When it comes to primary issuance, Hong Kong is way ahead.”
2) Fierce Regional Competition
Exchanges in Hong Kong, New York, and even Malaysia now outmuscle SGX. Hong Kong’s proximity to Chinese capital and its Stock Connect programme attract firms seeking dual access to mainland investors.
Meanwhile, Bursa Malaysia’s regulatory reforms—like fast-tracked IPO approvals and tax deductions for listing expenses—have made it Southeast Asia’s top destination for IPOs.
3) Investor Preferences and Economic Headwinds
Global uncertainty has shifted investor appetites. With interest rates hovering at 15-year highs, capital has flowed into private equity and bonds rather than public equities.
Deloitte notes that investors now prioritise “proven profitability” over growth—a challenge for Southeast Asia’s many pre-revenue tech startups.
Additionally, family offices and PE firms increasingly keep companies private for longer, delaying IPO timelines.
4) Regulatory and Structural Hurdles
While SGX offers grants covering 70% of listing costs, its regulatory framework lags. Mainboard listings require three years of profitability—a hurdle for tech firms—compared to Hong Kong’s revenue-based criteria for biotech companies.
The absence of a tech-focused board, akin to Nasdaq, further limits appeal. Meanwhile, high trading costs and complex clearance processes deter institutional participation.
SG Budget 2025: Strategic Measures to Boost SGX Listings
The Singapore Budget 2025, delivered on February 18, 2025, by Prime Minister and Minister for Finance Lawrence Wong, includes targeted measures to address this issue, particularly through the recommendations of the Equities Market Review Group.
This group, chaired by Minister Chee Hong Tat and established by the Monetary Authority of Singapore (MAS) in August 2024, aims to strengthen the equities market (MAS Sets Up Review Group to Strengthen Equities Market Development).
Its inaugural meeting identified priority areas, including encouraging listings and improving investor participation (Equities Market Review Group Convenes Inaugural Meeting).
The budget incorporates the group's first set of measures, focusing on tax incentives to attract companies to list on SGX and enhance market attractiveness. Detailed in the budget statement PDF (Budget Statement For Budget 2025), these measures include:
- Tax Incentives for Companies Listing on SGX: A 20% corporate income tax rebate for primary listings on SGX, capped at SGD 6 million annually, and valid until December 31, 2027. This was highlighted in media reports such as Budget 2025: Tax rebates to draw companies to Singapore, aiming to reduce the financial burden for companies going public, making SGX a more competitive option compared to global exchanges.
- Tax Incentives for Fund Managers: Tax benefits for fund managers investing substantially in SGX-listed equities, as noted in Budget 2025: Tax incentives to get more companies, fund managers to list on SGX. This is intended to increase demand for shares, enhancing liquidity and potentially leading to higher valuations, which can attract more companies to list.
These measures were part of the Equities Market Review Group's recommendations, with further details to be shared, as mentioned in the budget speech (A comprehensive set of measures to strengthen Singapore's equity market).
The group noted that companies with a strong local or regional presence, which may not be large enough for global exchanges, are a target group, indicating a strategic focus on niche market segments.
Impact on the IPO Drought
The introduction of these tax incentives is expected to benefit the IPO drought by making listing on SGX more financially attractive.
The 20% corporate income tax rebate directly reduces costs for companies, potentially offsetting the allure of listing abroad, where higher valuations and liquidity are often cited as reasons for choosing other markets (Can Singapore’s 2025 Budget Give a Boost to the Singapore Exchange (SGX)?).
For instance, companies like Sea Ltd and Razer Inc have listed on the NYSE and HKSE, respectively, due to perceived better market conditions (The Great IPO Drought: Does This Spell Doom for Singapore Exchange Limited?).
The tax incentives for fund managers are designed to increase investment in SGX-listed companies, which can lead to improved market depth and liquidity.
This is crucial, as liquidity has been a concern, with reports indicating sluggish trading volumes on SGX (Singapore's IPO Drought).
Higher liquidity can make SGX more appealing, encouraging more companies to consider IPOs, thus addressing the drought.
However, expert analyses suggest that while these measures are promising, long-term success may require addressing broader structural issues, such as market depth and investor interest (Budget 2025: Quick takes on tax incentives for companies, fund managers that list in Singapore).
The budget's focus on regional companies is a strategic move, potentially filling a gap left by global exchanges, but its effectiveness will depend on implementation and market response.
Detailed Breakdown of Incentives
To organize the information, here is a table summarizing the key tax incentives:
| Incentive Type | Details | Duration | Impact on IPO Drought |
|---|---|---|---|
| Corporate Income Tax Rebate | 20% rebate for primary SGX listings, capped at S$6 million annually | Until Dec 31, 2027 | Reduces listing costs, attracts more companies |
| Tax Incentives for Fund Managers | Benefits for investing substantially in SGX-listed equities | Not specified | Increases demand, improves liquidity, boosts valuations |
This table highlights the financial benefits and their potential to address the IPO drought, providing a clear overview for stakeholders.
Singapore’s IPO drought stems from structural issues—liquidity gaps, regulatory rigidity, and global competition—not cyclicality.
For investors, this turmoil creates opportunities. Undervalued REITs, upcoming AI listings, and SGX’s push into sustainable finance offer avenues for growth.
As the exchange adapts, staying informed and diversified remains key. As Lee Ooi Keong, a veteran governance expert, advises: “Revitalising SGX requires patience—but the foundations for recovery are being laid.
The Singapore Budget 2025's tax incentives for SGX listings and fund manager investments are a direct response to the IPO drought, aiming to make the SGX more competitive and attractive.
By reducing financial burdens for listing companies and boosting investor participation, these measures seek to reverse the trend of declining IPOs, enhancing market vibrancy and supporting Singapore's position as a financial hub.
While initial steps are promising, ongoing efforts and market responses will be critical for long-term success.
The road ahead is steep, but not insurmountable. With strategic reforms and investor engagement, Singapore’s stock market could yet reclaim its regional prominence.
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