Mr Speaker,
I will speak today on Section 92K of the Finance (Income Taxes) Bill, which is part of the government’s emerging strategy to improve the attractiveness of Singapore’s equity market. It provides time-limited tax incentives for both primary and secondary listings.
Before I begin, let me preface by saying I will use the term “SGX” as shorthand for SGX’s equities business. The SGX as a whole is a multi-asset exchange that has great strengths in FX, commodities and other derivatives, and I think those parts of the business, including BidFX and iron ore, have been doing a good job.
(Section 92K)
On Section 92K, my overall view is that these measures, a time-limited experiment in tax incentives, are in themselves unlikely to move the needle on improving the SGX’s competitiveness, for good or bad. Although I have general reservations about some of the bill’s principles, on balance, since it is tightly-scoped by being both limited in time and capped in subsidy, I support the bill to give this government latitude to experiment.
92K introduces a tax rebate to encourage companies to list their shares on the SGX. Companies that list their ordinary shares on a Singapore stock exchange between 19 February 2025 and 31 December 2027, new listings or re-listings, both primary and secondary listings, will qualify. Shares must be offered to the public in conjunction with the listing.
The company receives a tax rebate for 5 years. 20% of corporate tax for periods with a primary listing, and 10% for a secondary listing. These are capped at 6 million dollars a year if the market capitalization is at or above 1 billion dollars on listing date, and 3 million dollars a year if it is below that figure.
The company must remain listed throughout the entire 5-year period, and must apply for approval by 31 December 2027.
The principles of 92K that I have reservations about are -
First, the extension of rebates towards secondary listings. From the companies’ perspective, academic research shows secondary listings work primarily when listing in the US, where companies gain from superior governance[1] standards or valuation premiums[2]. It is debatable if Singapore offers either advantage. The advantages are not of secondary listings in general, but of the US in particular.[3]
I can understand why SGX might want to encourage secondary listings. They are a prelude to secondary offerings. In FY2025, SGX had 6 new listings, raising 25.7 million. This was dwarfed by secondary offerings, which was a hundred times larger at 4.3 billion.[4] SGX’s function as a capital-raising venue for already listed companies is currently much more significant than its listings. SGX Chairman Koh Boon Hwee has argued for the need to take calculated "first-mover" risks to build liquidity. Presumably, anchoring more secondary listings is one of those “first-mover” risks.
But from Singapore’s perspective: I do not see much benefit in giving incentives to attract secondary listings, especially combined with a disclosure-based regime which may result in a bigger slate of lower quality companies. At the point of entry, many may just make the number of listings and market cap look better, while not creating broad local employment since their operations are overseas. Some may disagree on the basis that these secondary listings may improve liquidity and generate turnover, but how much of this is sticky multi-year liquidity, and how much is transient event-driven volume? I ask, what is the basis of the Government’s belief that it will lead to high–quality liquidity?
For me, the bigger philosophical questions from first principles - why would a company want to do a secondary listing in Singapore? Why would Singapore benefit overall from more secondary listings in a disclosure-based regime? - remain inadequately answered.
Overall, I would rather we focus on attracting quality primary listings over extending incentives to secondary listings. But since the trial is limited in time and scope, we will support the bill’s scope in toto. We hope the results will be published and guide future market development.
The bill addresses three key tactical problems regarding secondary listings:
(a) Many secondary listings come “by introduction”, meaning no new shares sold, which leaves little local free float and tends to depress local turnover. HKEX, Hong Kong’s exchange, warns that secondary listings can suffer from “failure to develop or sustain an active trading market,” which is why they flag such stocks prominently with an “S” marker.[5]
SGX currently has 29 secondary listings[6]. Multiple high-profile SGX secondary listings were by way of introduction (meaning no new shares) - this includes the 2010 listing of Prudential[7], and the 2022 SGX listing of electric-vehicle company NIO[8], which GIC is now suing[9] for securities fraud in the Southern District of New York. These secondaries have had thin local trading versus their primary venues, with exception of the Jardine group. So far, secondary listings have been a mixed bag.
I will return to this point about poor quality listings later. But tactically, 92K insists that shares must be offered to the public, ensuring some float. So listings by introduction are excluded from rebates. This is prudent.
And while this is not in the bill, I note that MAS has the GEMS Research Development Grant[10], which provides a top-up per research report, more if it covers pre-IPO and new-listed names. This will help strengthen the value-proposition of a listing here in Singapore, even if we cannot offer much valuation premium.
(b) The tax rebates are also tied to the profitability of the company. If the companies are loss-making, they will not qualify for the rebates. If it were not the case, we could be attracting rebate tourism from dubious companies.[11]
(c) Last and most importantly, these measures are time-limited, until the end of 2027.
The second principle I have reservations on is this whole idea of giving listing incentives at all.
I could not find much evidence that having listing incentives will improve the quality of companies or long term performance. In fact, the converse was more likely true. The Québec Stock Savings Plan[12], which offered taxpayers generous tax write-offs for investments in new public stock issues of companies - drove a short-term surge in small-company primary issues, but many issuers later disappeared or posted weaker earnings; the impact on capitalization was short-lived and overall stimulus effects were limited.
For listing incentives, from the companies’ perspective, it may be unsustainable once incentives end, and these companies may fail or simply delist when that time comes.
What we are likely to see is a short-term pop in the numbers, because without answers to permanent questions around liquidity, disclosure quality, investor depth, and regulatory credibility, strong secular headwinds remain.
Some say that it is a chicken and egg problem building liquidity and investor depth. I understand this view, but I believe that raising the quality of listed companies is preconditional to building this two-sided market.
Other jurisdictions are not focusing on financial incentives. Hong Kong is focused on raising corporate governance standards, enforcement, and improving processing efficiency[13], which is in my view, a more correct approach.
Hong Kong’s listing rules have historically been stricter than SGX in areas such as independence of directors, remuneration disclosures, and related party transactions, and their regulators have been much more aggressive in enforcement actions including against directors. Hong Kong recently introduced a new Corporate Governance Code with stricter requirements—limiting independent non-executive directors to 6 listed directorships[14], mandatory continuing professional training, board skills matrices, and performance reviews. They are raising standards without using financial incentives.
On 29th October, SGX RegCo announced it would remove the financial watch list and introduce more flexible listing rules under a "disclosure-based approach."[15]
This is paradoxical to me. The watchlist itself was disclosure - it flagged financially distressed companies to investors. Removing it doesn't increase disclosure; it removes a critical warning signal. What SGX calls a "disclosure-based approach" actually means more disclosure for poor companies while keeping them listed and trading, but less disclosure and actionable information for the market as a whole.[16]
I therefore disagree with the removal of the watchlist. Industry players supporting its removal may of course benefit from more trading volume, even if low-quality. Their incentives may not align with retail investor protection. Taiwan's 54%[17] retail participation versus our 21%[18] shows what happens when retail investors have confidence—confidence built on quality signals like watchlists[19] and Investor Protection Centers[20].
(Positive Vision)
I will now move on to a few remarks on the principles that should underlie our stock market.
At its core, a stock market strikes a 'domestic bargain': savers get high-quality asset appreciation, and local enterprises get capital and exit opportunities. All other functions - such as foreign capital allocating to Singapore, or overseas companies listing in Singapore - are extensions of this core.
Four structural realities constrain our equity market:
First, the “ASEAN gateway” strategy is becoming obsolete. It may have worked for Singapore when other Southeast Asian countries did not have a strong local market. But today, Thailand and Vietnam have their own mature and highly liquid markets, with domestic brand recognition. ASEAN companies no longer have as many compelling reasons to list on the SGX vis-a-vis their home exchanges.
Second, our regulatory reach is limited over other foreign markets. This means for foreign companies we are exposed to information asymmetry and governance risks we cannot adequately mitigate, such as for the fraud-accused NIO.
Third, passive capital demands quality indexes. The tidal force of passive investment is a secular supertrend. Sovereign wealth funds like Norway’s world-leading GPFG [Government Pension Fund Global] have demonstrated that low-cost passive investing outperforms the active management approach. I believe passive strategies will form the basis of significant portfolio allocations going forward.
But passive investment requires something fundamental: high-quality indexes or baskets worth buying. Investors must be able to trust that the basket of stocks they're purchasing represents genuine value, not a random collection of mediocre companies.
By lowering listing standards and removing investor protections like the financial watch list, the risk is that the quality of the SGX and STI is allowed to degrade precisely when global capital is demanding higher quality for passive allocation.
Let us not forget that active-management, to weed out mediocrity, is an expensive endeavour. You will pay an active manager above-and-beyond to do due-diligence to separate wheat from chaff. And these active management fees are a drag on any future returns.
You cannot attract passive capital by diluting the quality of your index. Any slackening in market-shaping and maintaining quality standards cuts directly against one of the most important structural trends in modern finance. I am bearish on any cutting of standards.
Fourth, passive capital also demands coherent indexes. Without quality and coherence, we cannot articulate what our market represents.
Big allocators need clarity about what each allocation represents in their portfolio. But look at the STI: Financials ~54%, Real Estate Investment Trusts or REITs ~16.4%, Industrials ~9.8%, Telecom ~7.5%, Utilities ~4.9%[21]. Almost entirely defensive.
There is also leakage. Secondary listings like Jardine Matheson and Hongkong Land (both managed from Hong Kong) comprise 5% of the Index but represent neither Singapore operations nor “Singapore Inc”’s core capital-formation interests.
Defensiveness and leakage are headwinds in building a future coherent story to ultimately increase the SGX’s valuation premium.
What would a future coherent story look like?
Not mimicking NASDAQ's high-beta growth. Not remaining purely defensive. But rather: a foundation of quality SMEs - profitable, well-run, the "domestic bargain" in action - complemented by selective growth engines from a robust R&D industrial policy.
The local stock market is currently dominated by GLCs [Government-Linked Companies]. However, Singapore has a long-tail of well-run, profitable SMEs which do require growth-capital. They aren’t super-growth companies but they deserve capital and can anchor our index.
We need to meet our economy where it is. SGX should become an exchange that looks out for growing SMEs and cultivates a pipeline for listing. This should include overhauling the sponsor-based Catalist board to be replaced by a non-trading, capacity-building “incubation board” which graduates to OTC-style boards as a prelude to mainboard listing. SMEs are the companies that would benefit most from a supportive exchange ecosystem, including the long-tail of research needed to cover them.
The second layer would be selective growth from R&D. Commercial offshoots from our RIE masterplans in Pharmaceuticals, Advanced Manufacturing, and Deep Tech should be able to list at an earlier stage to access domestic capital. The collapse of Tessa Therapeutics[22] in 2023 - despite raising over $200 million US Dollars - illustrates the brittleness of relying solely on late-stage venture funding without domestic capital market support. Without opining on the commercial validity of that specific decision, I believe capital-intensive R&D ventures could benefit from accessible public markets. Earlier-stage listings would build local investor familiarity with science-based companies, and allow incremental capital raising as milestones are met, and would perhaps have improved the odds for some of the first-generation Biopolis companies which failed. That is why I support SGX Regco’s amending of admission requirements for life science companies.
(Substantiation Sought)
With your indulgence, Mr Speaker, before I end, as this bill touches upon the stock market, I would like to correct some statements about the Workers’ Party’s stock market proposals.
Minister Chee Hong Tat, at a DBS-hosted fireside chat on 22nd October 2025, said (quote)
“Over the past year, we have worked closely with the industry to come up with proposals that could enhance the liquidity and competitiveness of Singapore’s equities market. We decided not to go for quick fixes, such as asking GIC or Temasek to pump-prime the market by mandating them to invest a certain amount in local equities. I explained in Parliament previously, in response to similar calls by the Workers’ Party, that I do not believe such superficial measures will be effective and sustainable. It is what the Chinese call 治标不治本 [Zhìbiāo bù zhìběn], solutions that may sound good in theory but actually do not solve the underlying problems facing our equities market.”[23] (end quote)
I am not sure what “calls” the Minister is referring to. I have looked around and asked my colleagues but drawn a blank. My colleague Louis Chua did speak in this year’s COS about our stock market, but he suggested two things: letting more of Temasek’s GLCs list on SGX and strengthening corporate governance standards. He did not suggest what the Minister has called “pump-priming”.
But I did manage to find this exchange while digging in the Hansard, a PQ from 2nd July 2024.
(quote) asked the Prime Minister and Minister for Finance whether the Government will review its investment mandates with GIC to consider the suggestion from some industry players for GIC to allocate part of its investments to securities listed on the Singapore Exchange to revitalise our local stock exchange. (end quote)[24]
The source of that pump-priming question was MP Liang Eng Hwa, who is not a WP MP.
So, respectfully, I would like to ask the Minister to please clarify and source his comments.
Thank you, Mr Speaker. I support the Bill.
[1] https://scholarship.law.columbia.edu/faculty_scholarship/31/
[2] https://www.sciencedirect.com/science/article/abs/pii/S0304405X03001831
[3] A large academic literature documents valuation and financing benefits when firms list in the US, attributing this to stronger investor-protection/enforcement (“bonding”) and disclosure. Classic references: Coffee (2002); Doidge, Karolyi & Stulz (2004/2009); Hail & Leuz (2009)—all show that US exchange listings (vs. non-US venues) have historically carried higher valuations/lower costs of capital for foreign issuers.
[4] https://investorrelations.sgx.com/static-files/5d920b13-c5bb-4280-9b84-74025f006fc5 (SGX Annual Report 2025)
[7] https://www.prudentialplc.com/~/media/Files/P/Prudential-V13/hkex/2010/2010-05-24c/2010-05-24c.pdf
[10] https://www.mas.gov.sg/schemes-and-initiatives/grant-for-equity-market-singapore-scheme
[11] While this will gate unprofitable hypergrowth companies, (a) I don’t believe Singapore is suitable for them anyway (b) even if we did want to make it happen, it shouldn’t be on the current SGX mainboard but a growth-oriented index.
[12] https://cirano.qc.ca/en/summaries/97s-16
[14] https://www.hkex.com.hk/News/Regulatory-Announcements/2024/2412192news?sc_lang=en
[16] Noble Group (2011–2017 accounts): MAS and SGX RegCo reprimanded Noble and its former directors for misleading non-compliance with accounting standards; police and ACRA investigations followed. MAS/SGX later rejected Noble’s relisting in 2018 citing “significant uncertainties” about its financial position.
Eagle Hospitality Trust (EHT): Former CEO was charged in 2024 for disclosure offences (false statements and non-disclosure of conflicts). Trading had been suspended since 2020 and the trust was later wound up—widely cited by investors as a governance/disclosure failure.
[17] https://www.twse.com.tw/downloads/zh/about/company/factbook/2025/3.04.html (2024)
[19] Taiwan has a similar mechanism called “altered trading” method: https://www.selaw.com.tw/English/LawArticle?sysNumber=LW10810509
Japan (TSE) has “Securities on Alert / Under Supervision” and Korea (KRX) has “Management/Administrative Issues” (관리종목) & Investment Warning/Alert
[20] https://www.sfipc.org.tw/en/ Taiwan’s SFIPC was established in 2003 under the Investor Protection Act to safeguard the rights of securities investors and futures traders. Its core mission is to uphold market integrity and promote sound corporate governance through a range of protective mechanisms, including litigation, mediation, and shareholder activism.
[21] https://www.ssga.com/sg/en/institutional/etfs/spdr-straits-times-index-etf-es3 (as of 31 Oct 2025)
[24] https://sprs.parl.gov.sg/search/#/sprs3topic?reportid=oral-answer-3600
