Image and Article Credits: The Edge Singapore
Details for the ‘Value Unlock’ programme for Singapore-listed companies are expected soon. The Edge Singapore recently sought views on this initiative, and I was pleased to share my thoughts on the ‘big-picture road-map’ needed to boost investor confidence, enhance liquidity, and improve market valuations.
My original post on LinkedIn can be seen here.
The objectives of the programme are clear, but success requires a multi-faceted approach:
Higher valuations: Improved transparency and liquidity are envisaged to lead to higher valuation multiples for Singapore-listed companies.
Stronger corporate governance: In the quest to re-invigorate the Singapore bourse, the Singapore market regulators must strike the proverbial balance of not compromising regulatory standards. Where relevant, listing rules and securities laws must be reformed to enhance governance standards in line with international principles of a disclosure-based regime.
Enhanced investor engagement: Issuers must be encouraged to provide clearer and more frequent communications with investors about their business plans and prospects through more effective investors’ relationship management, up-to—date market announcements of material developments – hat is paramount to an orderly and efficient market.
Improved capital allocation: The programme must encourage boards to make capital allocation decisions that are consonant with sustainable business plans and strategies with clear directions to growth and profitability.
Support and resources: The financial support and grants by the Singapore government to encourage companies to list on the local bourse is most commendable.
Regulatory improvements: It is heartening to note that the MAS is seeking pubic feedback and fine-tuning the policy requirements and guard-rails on the initiative to finance class actions against errant mis-management and disclosure breach by issuers – to enhance investor recourse avenues.
Focus on transparency: There must be greater emphasis on corporate transparency to strengthen investors’ confidence and market sentiments that have significant impact on valuations.
Increased shareholder value: The ultimate goal is for Singapore-listed companies to deliver greater shareholder value and returns. The collective outcome will have a positive snowball effect on liquidity and valuations which are cardinal to a dynamic stock market.
Stronger market attractiveness: The net effect of the above actions will hopefully enhance the attractiveness of Singapore’s equity market to investors to promote better liquidity.