The Business Times recently published commentary on the renewed IPO and listing activity on the Singapore Exchange, examining what a fresh cohort of listing aspirants signals for the local bourse. The piece invited a reflection on a more fundamental question that sits behind any listing: what a public listing is actually for. The raison d’être for seeking a listing must be the primary objective of raising public equity to fund the long-term growth of the business, with growth and profitability that are sustainable. A listing is an important milestone in a company’s development plans, a means for the company to spring-board to greater heights in a sustainable manner, rather than an end in itself.
It was a privilege to contribute these thoughts to the discussion, and my thanks go to Ranamita for publishing them alongside an insightful article. The view offered was a straightforward one: whether a company’s share price rises or falls post-listing, or experiences a “dead-cat bounce” after a dazzling debut, should not be a matter of great importance. What matters is that the group’s businesses are premised on solid fundamentals, not propped up by short-lived spurts of momentum fuelled by the collective FOMO of speculators hoping to make a quick fortune, not unlike lottery gambling.
Against that backdrop, the recent measures implemented by the Singapore government, such as the Equity Market Development Programme and the Value Unlock Programme, are a welcome and correct “medicine” to help the Singapore stock market recover its balance. These are corrective policy and regulatory changes in the right direction, and they must be given time to take effect; they were never intended as a quick fix. While markets everywhere remain sensitive to geopolitical and external events beyond any government’s control, there is good reason to be sanguine that Singapore’s policy makers and regulators have acted, and will continue to act, in the long-term interests of the local market and its investors.
Sound markets are, ultimately, a shared responsibility. Retail investors must change their mindsets and not buy on hope, hold in greed, and sell in fear; they must do their own due diligence and take personal responsibility for their decisions rather than expect to be molly-coddled. The regulators’ steps to promote market research and analyst coverage give investors better tools to do exactly that. The original post is available on LinkedIn here.