The Monetary Authority has appointed the first batch of asset managers to manage HKD 1.1 billion of the securities market development plan
The Monetary Authority of Singapore has appointed three asset management companies to manage S$1.1 billion under the Securities Market Development Program, aimed at strengthening the Singapore stock market. The program has a total scale of S$5 billion, and an additional S$50 million has been allocated to encourage newly listed companies to conduct research. The authority will explore ways to improve legal provisions to assist retail investors in seeking compensation through civil litigation and will launch a public consultation later this year
Futun is a company under Temasek Holdings, while Avanda was founded by Huang Guosong, the former Chief Investment Officer of the Government of Singapore Investment Corporation and a candidate in the last presidential election, along with his partners. Morgan Asset Management is the investment management arm of JPMorgan Chase, the largest bank in the United States.
Xu Fangda, who leads the securities market review group, revealed that the group has received feedback indicating that investors pursuing compensation through civil litigation is not only time-consuming but also somewhat challenging. Therefore, the Monetary Authority of Singapore (MAS) will seek market opinions on how to lower the barriers, making it easier for investors to seek compensation while balancing the avoidance of a large number of lawsuits.
The MAS made the above announcement on Monday (July 21), which are recommendations proposed by the MAS securities market review group in February this year to strengthen the local stock market.
To enhance the development of the Singapore stock market, our country launched a SGD 5 billion securities market development plan at the beginning of this year. After several months of evaluation, the Monetary Authority of Singapore announced the first batch of three selected asset management companies, appointing them to manage SGD 1.1 billion of investments.
The MAS pointed out that since the launch of the securities market development plan in February, over 100 asset management companies from around the world, regionally, and locally have expressed their willingness to participate. The authorities are evaluating them in batches and expect to announce the second batch of selected asset management companies in the fourth quarter of this year.
He said, "At the same time, we hope that these asset management companies can attract more private capital to participate, thereby promoting the Singapore stock market, especially the liquidity of small and medium-sized stocks."
The MAS has also allocated an additional SGD 50 million for the Singapore Capital Markets Grant (GEMS) to encourage newly listed or pre-listed companies to conduct analytical research. This market grant, which was launched in 2019, will be extended until the end of 2028.
The review group aims to complete all review work by the end of this year and publish a final report.
In addition, the group is exploring more ways to strengthen the stock market, including how listed companies can better communicate with shareholders, enhance the value proposition and attractiveness of the Singapore Exchange's Catalist board, adjust the minimum trading lot size, and engage in more cooperation with overseas exchanges to promote cross-border trading and listings.
National Development Minister and MAS Deputy Chairman Xu Fangda said in a media interview on Monday, "When we invite asset management companies to propose, we have already indicated that this is not just about injecting funds into the Singapore stock market; we also want to develop Singapore's fund management industry."
Xu Fangda: Hopes for more retail investors in the stock market but not as a short-term gamble
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Eligible asset management companies are prioritized to invest in the Singapore stock market, but their investment scope cannot be limited to just the Straits Times Index constituents; they must also have the capability to attract other investors to participate.
To enhance investor protection, the MAS is also exploring how to strengthen existing legal provisions to allow retail investors who suffer losses due to market misconduct to seek compensation through civil litigation. The MAS will conduct public consultations later this year The first batch of selected asset managers includes Avanda Investment Management, Fullerton Fund Management, and J.P. Morgan Asset Management.
Leveraging improved market liquidity, Xu Fangda hopes to encourage more retail investors to invest in the local stock market, but he emphasizes: "It is not about viewing the stock market as a short-term gamble, but rather understanding long-term investment and accumulating capital. I believe this can also help young and middle-aged people better plan for retirement."
Singapore Exchange CEO Loh Boon Chye believes that the multi-pronged approach of the review committee aligns with the Singapore Exchange's ongoing efforts to expand market participation, increase the variety of trading products, and attract quality companies to list. "Our stock market is poised for growth; this is just the beginning. Through everyone's collective efforts, we can attract stronger and more sustainable capital flows."
