Monetary Authority of Singapore Subsidizes New Equity Listings with S$75 Million Grant

Seeking to boost their prominence as an equity financing hub in Asia, the Monetary Authority of Singapore (MAS) has announced a grant of S$75 million to help businesses raise funding via the Singapore equity market. Singapore is one of the most business-friendly jurisdictions in the world. The combination of a supportive government, rule of law and high standard of living have helped to establish the small country as an economic powerhouse relative to its size. Singapore is a also a well established Fintech hub.

The “Grant for Equity Market Singapore” or “GEMS” will have three components. Perhaps the most interesting is the Listing Grant which defrays part of the cost to do an initial public offering (IPO) on the Singapore Exchange (SGX).

The level of funding is as follows:

  • Enterprises in new technology sector1 with a minimum market capitalization of S$300 million
    • Co-fund 70% of eligible listing expenses, with the grant capped at S$1 million
  • Enterprises from high growth sectors with a minimum market capitalization of S$300 million
    • Co-fund 20% of eligible listing expenses, with the grant capped at S$500,000
  • Enterprises from all sectors with no minimum market capitalization
    • Co-fund 20% of eligible listing expenses, with the grant capped at S$200,000

MAS states that Singapore’s equity market has supported the fundraising needs of a wide range of enterprises when they choose to list on SGX. This includes listings of foreign enterprises, real estate investment trusts and business trusts.

In some jurisdictions, the cost of an IPO has become exorbitant compelling issuers to remain private as long as possible. This fact undermines the ability of public exchanges to remain a vital variable in the capital raising process. It also undermines the ability of a broader group of investors to participate in the growth stage of younger firms.

Additionally, GEMS has two other components intent on raising Singapore’s profile as a destination for younger firms. These two components are:

  • Research Talent Development Grant: to strengthen Singapore’s research coverage of enterprises by grooming equity research talent
    • The grant will co-fund locals in the following areas:a. 70% of the salaries for fresh graduates hired as equity research analysts; and
      b. 50% of the salaries for re-employed experienced equity research analysts.
  • Research Initiatives Grant: to support crowd-sourced initiatives to propel the development of Singapore’s equity research ecosystem.
    • MAS will earmark funds to crowd-source initiatives that will propel the development of Singapore’s equity research ecosystem. Such initiatives can include publication of industry or sector primers, innovative ways to distribute research and disseminate enterprise information to investors.

Ng Yao Loong, Assistant Managing Director, MAS, said that Singapore has been working to enhance their private and public markets so that domestic and international growth enterprises are able to access different types of capital best suited to their needs.

“Results from our private market initiatives and bond grant schemes have been encouraging. GEMS will help strengthen Singapore’s position as the go-to venue in Asia for enterprises seeking growth financing.”

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