The Singapore Straits Times Index (STI) has been climbing in a nearly straight, upward trajectory since April 2025.
What are the key drivers of the recent uptrend?
Banking sector leadership, investor flight to safety, technical breakout, and, more importantly, equity market reform and incentives.
Equities market reform and incentives
From 2020 to 2024, Singapore experienced a significant decline in both listing volume and size, particularly in 2024, with only four listings on the Catalist Board, highlighting the challenges in attracting large-scale listings.
To strengthen the development of the equities market in Singapore, the Equities Market Review Group was established in August 2024 to recommend measures to deepen the capital markets, attract quality listings to the Singapore Stock Exchange (SGX), and enhance investor participation and liquidity.
With the government efforts, there are currently more than 30 companies actively preparing to go public, signalling a revival in listings. Singapore's central bank announced in July 2025 that it will allocate S$1.1 billion to three asset managers as part of a S$5 billion equity market development programme (EQDP) to further enhance the stock market.
Tax measures
Given the increasing interest in SGX, companies should be reminded of the new tax incentives introduced during the Budget 2025 announcement. The incentives work as a financial “sweetener” to make SGX more attractive for both issuers (companies listing) and intermediaries (banks, law firms, IPO sponsors):
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Listing CIT Rebate for new corporate listings in Singapore (time limited and available from 19 February to 31 December 2027) |
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Enhanced corporate tax rate of 5% for new fund manager listings in Singapore |
5% corporate tax rate on fees earned from qualifying fund management and investment advisory activities under the “Financial Sector Incentive – Fund Management” |
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Tax exemption on fund managers’ qualifying income arising from funds investing substantially in Singapore-listed equities |
Tax exemption on fees earned from fund management and investment advisory activities related to the following qualifying funds:
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Maximising tax benefits
To reap the tax benefits under the new SGX-related tax incentives, companies should approach the listing process with strategic planning to qualify for the relevant deductions and grants.
Identify eligible costs early: Certain expenses incurred during the IPO process may qualify for tax deductions or grants. These typically include:
- Professional fees (legal, accounting, underwriting)
- Regulatory filing and compliance costs
- Prospectus preparation and printing
- Investor roadshow and marketing expenses
- Listing and exchange-related fees
2. Tap the Monetary Authority of Singapore (MAS) Support
MAS co-funding and support schemes: Through initiatives such as the Equity Market Grant (EMG) or the Enhanced EQDP scheme, MAS may offer co-investment or incentivise fund managers to take positions in newly listed SGX companies. This can improve initial trading liquidity and potentially enhance company valuation.
3. Engage Early with Key Stakeholders
- IPO Sponsors: Collaborate with experienced IPO sponsors who can help structure the listing to meet the criteria for available incentives.
- Banks and Capital Market Advisors: Work with institutions familiar with SGX processes and MAS support schemes to streamline the listing and financing structure.
- Tax Advisors: Engage tax professionals early to interpret and apply the various incentive provisions correctly. Proactive planning is essential to ensure all qualifying conditions are met.
- Timing Considerations: Ensure the IPO is scheduled within the validity period of the incentive schemes to avoid missing out due to programme expiry.
There is no better time to take a strategic approach now to fully benefit from the EQDP and play a part in revitalising the Singapore equity market.