Introduction: Signs of a Turning Point for SGX
Singapore’s stock exchange, SGX, is on the brink of a long-awaited revival, with its chief executive Loh Boon Chye revealing that more than 30 companies are currently in discussions to list on the bourse. Of these, over 10 are already engaged in active talks with the exchange’s regulatory division about moving forward with initial public offerings (IPOs). This surge of activity marks a potential reversal of a decades-long trend in which companies exited the Singapore market in favor of larger, more liquid exchanges abroad, particularly in the United States.
The renewed IPO interest comes at a time when SGX has reported its strongest annual revenues and net profits in a quarter-century. It also coincides with a shift in global investment flows, prompted by U.S. trade uncertainty and a growing appetite among international investors for diversification into Asian markets. This combination of favorable market conditions, proactive business diversification, and regulatory initiatives may be setting the stage for a new chapter in SGX’s role as a regional capital markets hub.
Quantitative Performance: A Year of Record Financial Results
For the fiscal year, SGX reported net revenues of S$1.3 billion (approximately US$1 billion), representing a 12% increase from the previous year. Net profit rose by 8% to S$648 million, marking the highest levels in 25 years. The Straits Times Index (STI), which tracks the performance of the top 30 companies listed on SGX, gained an impressive 37% over the past 12 months, reinforcing investor confidence in Singapore-listed companies.
Despite these strong results, SGX’s equity market has faced structural challenges. As of June, the number of listed companies stood at just 608 — the lowest level in more than two decades — highlighting the magnitude of the decline since its peak. This downturn has been driven by large Southeast Asian companies favoring listings in deeper markets like New York or Hong Kong, where valuations and liquidity tend to be higher.
IPO Pipeline: From Decline to Momentum
The highlight of Loh’s announcement was the size and composition of the IPO pipeline. With more than 30 companies in early discussions and over 10 already in regulatory talks, SGX is signaling a potential rebound in new listings. This marks a meaningful shift in sentiment, suggesting that Singapore’s exchange is regaining relevance as an attractive venue for capital raising.
This momentum was exemplified last month by the listing of NTT SC Reit, a data center real estate investment trust. The IPO raised significant capital and was Singapore’s largest since 2017, serving as an early win for regulatory and marketing efforts to entice issuers. The Monetary Authority of Singapore (MAS), the nation’s financial regulator, has established a dedicated working group tasked with attracting more listings and deepening investor participation.
Strategic Positioning: Shifting Capital Flows
Global market volatility, driven in part by the uncertainty surrounding U.S. tariffs, has played to SGX’s advantage. Loh noted that while the U.S. remains the dominant capital market, investors are increasingly seeking greater diversification, shifting capital flows toward Asia. This shift has created opportunities for exchanges like SGX to capture global issuers and investors looking for alternative listing destinations.
The exchange is particularly appealing to companies with pan-Asian or Southeast Asian operations that may not fit the profile of Hong Kong listings, which have recently been dominated by Chinese corporates. SGX’s positioning as a more neutral and globally-oriented exchange is a key differentiator in attracting international issuers.
Diversification Beyond Equities: Building a Multi-Asset Platform
Since assuming the role of chief executive a decade ago, Loh has sought to reduce SGX’s reliance on equity listings by expanding into other asset classes. One of his signature moves was acquiring the UK’s Baltic Exchange, famous for compiling the Baltic Dry Index, a global benchmark for bulk commodity shipping costs.
Today, SGX’s business spans fixed income, currencies, and commodities, which collectively account for 26% of total revenue. The commodities segment — focused on iron ore, rubber, petrochemicals, and freight — is a particular growth area. Loh has indicated that SGX is actively considering targeted acquisitions to further expand its footprint in this space, aligning with shifting investor allocations toward alternative assets.
Comparisons with Regional Peers: The Hong Kong Factor
The contrast with Hong Kong’s IPO market is stark. Hong Kong Exchanges and Clearing (HKEX) recently announced a record-high pipeline of 208 companies preparing to list. HKEX has benefited from a wave of Chinese companies choosing Hong Kong over U.S. exchanges due to escalating geopolitical tensions between Beijing and Washington.
SGX, by contrast, attracts a more globally diverse issuer base, often with significant Southeast Asian exposure. This distinction could work in Singapore’s favor as companies seek to avoid being caught in the crossfire of U.S.-China financial decoupling. However, the sheer scale of Hong Kong’s IPO activity remains a competitive challenge for SGX to overcome.
Regulatory and Market Support for Listings
Recognizing the importance of revitalizing the IPO market, the MAS and SGX have intensified efforts to court issuers. This includes streamlining listing procedures, enhancing investor outreach, and promoting Singapore as a trusted, stable financial center. The early success of the NTT SC Reit listing suggests that these measures may be starting to bear fruit.
Moreover, the rise of sectors such as data centers, renewable energy, and logistics in the region could provide SGX with a niche to attract high-growth companies that align with Singapore’s economic priorities. The challenge will be to maintain a steady pipeline beyond a few high-profile IPOs and to rebuild the depth and vibrancy of the equity market.
Potential Implications for Investors and the Economy
A sustained revival of IPO activity on SGX could have far-reaching implications. For domestic investors, it would mean greater access to a diversified set of growth opportunities without having to venture into foreign markets. For the Singaporean economy, it could bolster the city-state’s status as a global financial hub, attracting not only issuers but also institutional capital, research coverage, and ancillary financial services.
From a macroeconomic perspective, SGX’s diversification into multi-asset classes positions it to weather potential downturns in equity markets. At the same time, the resurgence of listings could enhance liquidity and valuation benchmarks, creating a virtuous cycle that attracts even more companies to list in Singapore.
Conclusion: A Critical Juncture for SGX
The Singapore Exchange stands at a pivotal moment. After decades of watching its listed company count shrink, the combination of strong financial performance, a growing IPO pipeline, favorable capital flows, and strategic diversification offers a real chance at revitalization. Yet, the road ahead will require careful execution — balancing the need to attract new listings with maintaining market integrity and investor confidence.
If SGX can sustain its momentum and capitalize on its niche strengths, it could reassert itself as a leading capital markets destination in Asia, providing a counterbalance to the dominance of Hong Kong and the United States. The next few years will reveal whether this is the start of a lasting turnaround or a temporary uplift in the exchange’s fortunes.
