In its efforts to boost its status as an enterprise financing hub, Singapore has announced a $75 Mn grant in order provide financial assistance to enterprises hoping to list on the Singapore exchange, support research initiatives and subsidize the salaries of Singaporean equity research analysts.
The Grant for Equity Market Singapore (Gems) was launched by Finance Minister Heng Swee Keat at a UBS wealth insights conference today. Gems is funded by the Monetary Authority of Singapore (MAS) and administered by the Singapore Exchange (SGX) and will kick in from Feb 14.
Under the initiative, to support the fund-raising needs of companies when they choose to list on the SGX, a listing grant will be given out to eligible companies. This includes foreign enterprises but excludes real estate investment trusts and business trusts. The grant will help to defray the costs involved, such as legal and underwriting fees.
All eligible firms will be able to receive up to 20 per cent of the funds for listing expenses up to a cap of $200,000. Meanwhile, those in high growth sectors with a minimum market capitalization of $300 Mn will enjoy a higher cap of $500,000. These high growth sectors include those in the digital cluster, advanced manufacturing, hub services, logistics, urban solutions and infrastructure and healthcare.
Technology companies including fintech, consumer tech, on-demand services and gaming services, and peripheral manufacturers, with a $300 Mn market capitalization will benefit most, as the grant allows them to co-fund their expenses by 70 per cent or up to $1 Mn.
Also, a research talent development grant, primarily for listed mid- and small-cap enterprises, will fund 70 per cent of the salaries of fresh graduates hired as equity research analysts, along with 50 per cent of salaries for re-employed and experienced analysts.
MAS Assistant MD Ng Yao Loong stated that Gems aims to bolster Singapore's position as the "go-to venue in Asia for enterprises seeking growth financing".
"Singapore has been working to enhance our private and public markets so that domestic and international growth enterprises are able to access different types of capital best suited to their needs," he said.
The grant comes after a dismal performance for SGX initial public offerings (IPOs) last year, having raised the second lowest IPO funds in the past decade. This is on account of the strong competition from other regional exchanges for big listings and the ongoing United States-China trade conflict.