Singapore has released a few tax incentives to entice enterprises and fund managers to launch the stock market of the city and breathe a new life in this sector. The Singapore Exchange (SGX) is undergoing challenges like low liquidity and suppressed new listings. These matters have endured the market for a certain period of time now.
Suggestions were introduced by the Monetary Authority of Singapore (MAS) on Thursday, February 13, 2025, and regarded as a part of a thorough examination conducted by a team assembled by the government. Measures are undertaken to encourage the start and development of the funds that have substantial investment in the local equities, thus proving a thoughtful initiative for the revitalization of the local financial system.
The tax incentives that are yet to be passed are viewed as the first priority of the affirmation of the Singapore stock market. Through grants and other means, the government intends to get companies local and international to consider the SGX as a good platform for IPOs which might result in the increase of volume and number of stocks over the already given par.
For a long time, experts have been calling for these measures, pointing out that Singapore’s stock market has been facing a defeat in terms of the competition with some of its regional rivals. The new incentives are anticipated to eliminate the disadvatages and thus, Singapore will eventually be able to enjoy a significant share of the market in the Asia-Pacific region.
Though the full information about the details of tax incentives is not yet out, some sources familiar with the issue have said that the incentives might include the reduction of the corporate tax rates for the firms that will be newly listed, tax breaks for investors in SGX listed stocks and incentives for fund managers who invest most of their funds in the Singapore equities.
The decision has been met with a positive response from many trading participants, who perceive it as an essential measure to reactivate the local bourse. Analysts expect that if these steps are executed properly, it is likely to result in a lot more listings of companies and also a significant increase in trading volumes on the SGX in the next couple of years.
On the other hand, there are some who voice doubts that the sole use of tax incentives will help handle the fundamental problems that the stock market in Singapore is facing. They say that the more concerted reformation such as easing the listing requirement and boosting market liquidity will be the things needed for the long-term to be successful.
The release of the news occurred in the STI, which is Singapore’s barometer of stock} is downward in its performance with some signs of breeze and sun in the current week. At the end of the trading day on February 13, 2025, the STI had lost 3,872.64 points from its previous level of 3,872.67, which was a decrease of 0.05% during the day.
Be that as it may, financial analysts in the securities sector are still upbeat about the great prospects in the capital market of Singapore though there are some blips as seen this time around. These incentives, if implemented, will likely set the table for the sustainable growth of financial services and have a positive effect on investor sentiment and market activity by the end of the year?
The government has again shown its commitment to the stock market by being proactive in tackling the difficulties faced by the stock market, and this is an indication that Singapore is not slackening in the quest to be a reputable financial hub in Asia. Through taking silimar step, Singapore aims to not only gain the qualitative development of its stock market but also to elongate its financial services offering as well as to get various investors and corporations.
With the proposed tax incentive being finalized and implemented, it is expected the Singapore stock market will show vitality in a way that can encourage the investor and investors to keep a close eye on the clock of recovery.