SINGAPORE – The government unveiled a package of initiatives on Friday (September 17) to attract high-growth local and regional high-tech companies to list on the Singapore Stock Exchange (SGX).
The biggest move is the creation of a fund, dubbed Anchor Fund @ 65, with an initial tranche of $ 1.5 billion, which will help promising high growth companies raise capital through public listings here. The government and Temasek Holdings will co-invest in the fund.
A high-growth business typically generates significant positive cash flow, which grows at a faster rate than the overall economy. However, they usually pay little or no dividends to shareholders, choosing instead to reinvest most or all of the profits in his growing business.
Another initiative is the Growth IPO Fund, which focuses on late stage private companies that are two or more rounds of funding from listing. This will help them grow and prepare for a possible Initial Public Offering (IPO) here.
This IPO fund – with a first tranche of $ 500 million – will be set up by EDBI, the investment arm of the Economic Development Board, and will focus primarily on future market leaders and technological innovators.
The Monetary Authority of Singapore (MAS) will also strengthen its Grant for Equity Market Singapore (Gems) program, introduced in early 2019, to increase its support for companies looking to enroll and further develop the equity research ecosystem. Singapore stocks.
SGX, for its part, will launch a strategic partnership model to develop tailor-made solutions ranging from private market fundraising to increasing liquidity and raising global investor awareness for high growth companies.
Speaking at SGX’s Securities Market Open event on Friday morning, Trade and Industry Minister Gan Kim Yong said Singapore will make a concerted effort to establish itself as the top listing destination for leaders in local and global markets, particularly high growth and high growth markets. -technological sectors.
“In the years to come, many Singaporean and Asian companies in high-growth high-tech sectors will become major and seek public market listing. We must strive to anchor these companies in Singapore, ”he said.
Developing the initiatives, Mr. Gan said the Anchor Fund @ 65 will be managed on a commercial basis by 65 Equity Partners, a new investment platform wholly owned by Temasek.
65 Equity Partners will also manage the $ 65 Billion Local Business Fund, which was announced in this year’s budget to help large local businesses transform, grow and grow.
The Anchor Fund @ 65 and Local Enterprises Fund @ 65 will have access to Temasek’s strong network and in-depth expertise and will be well positioned to help portfolio companies grow and prosper from inception to listing, said The Minister.
The Gems Registration Grant, which helps cover registration costs, will see its cap increased from $ 1 million to $ 2 million to better support unicorn society registrations in Singapore. The grant will also be expanded to support registrations by Special Purpose Acquisition Companies (Spac).
To facilitate price discovery and increase trade liquidity, MAS will extend the Gems Research Talent Development Grant to co-finance the costs of recruiting research talent for two years, up from a year earlier.
“We know that the initiatives we are launching today are not a quick fix. But we believe they will breathe new life into our stock market sails and make SGX not only a viable option, but a compelling option for innovative growth companies as well. “
Mr Gan said the package was not just intended to have high valuations or high market capitalization.
“It’s to give Singapore and the region’s most promising start-ups and entrepreneurs another growth engine, and to allow them to stay rooted here as they ride the wave of opportunities at the global scale. “
A joint statement from the Ministry of Trade and Industry, MAS and Temasek said the initiatives will enhance Singapore’s attractiveness as a destination for raising capital by local and regional businesses.
SGX Managing Director Loh Boon Chye said, “There are many Asian and local companies that are on the cusp of global success.
The initiatives will build on SGX’s recent efforts to strengthen its trading platform, connectivity and range of fundraising options, including dual-listing collaborations with foreign exchanges and the launch of the Spacs framework. .
“This inter-agency initiative further sets Singapore apart as a hub for capital markets and is the first of its kind in the region that secures the success of market leaders through close collaboration between the public and private sectors,” said Mr. Loh.