SINGAPORE — Singapore is aggressively courting private companies and financiers to boost capital-raising in the city-state, as rival financial hub Hong Kong draws in technology companies for fundraising with initial public offerings.
The city-state announced on Thursday and Friday plans worth billions of dollars to position the Southeast Asian hub as a magnet for “growth capital,” which has been typically going into tech companies, including those specializing in emerging fields like artificial intelligence.
After Hong Kong recently welcomed a slew of tech IPOs, Chee Hong Tat, deputy chairman of the Monetary Authority of Singapore, told reporters on Friday that the global financial industry has ample room for multiple hubs serving diverse needs.“Different financial centers will have different strengths,” he said. “For Singapore, I think I see our strength as the connections that we have with the region, and this is not only through our venture capitalists, but also through our financial institutions — our linkages through the industry.”
Delivering the city-state’s budget for the year on Thursday, Prime Minister Lawrence Wong said his government will earmark an extra SG$1.5 billion for an existing fund to draw “high-quality public listings.” The fund provides pre-IPO financing for target companies that supports them ahead of a debut on the Singapore Exchange.
Another SG$1 billion will be set aside to cover “growth-stage companies,” with the money allocated to a scheme to amass private funding for “promising startups,” Wong said.
An additional SG$1.5 billion will be devoted to developing Singapore’s fund management industry and raising investor participation in equities listed on SGX.
In November, the MAS announced a plan for the SGX and America’s Nasdaq to launch a program in which startups can be publicly listed simultaneously on both bourses.
“Many firms, especially in deep tech, find it harder to raise the larger and longer-term funding that’s needed to scale,” Wong, who is also finance minister, said on Thursday. “We will therefore do more to catalyse growth capital in Singapore.”
Meanwhile, Hong Kong is building clout as a hub for tech firms to raise funds. A number of companies that have gone public in the Chinese-ruled city this year are focused on AI or chips technology.
Investor enthusiasm for China’s homegrown AI companies has lifted Hong Kong Kong’s Hang Seng index and the mainland’s blue-chip CSI 300 to new highs.
Singapore has also benefited from investor bullishness on certain Asian equities. The benchmark Straits Times Index reached 5,000 points for the first time on Thursday.
While Hong Kong’s rise can be attributed in part to AI fervor, Singapore’s rally is led by financial institutions from the more traditional banking sector.
The city-state’s authorities are hoping to complement this with an increasing clutch of tech IPOs that carry promise to deliver growth for investors.
“The STI has rallied more than 28% in the last 12 months and continues to outperform Asia peers,” JP Morgan’s Global Markets Strategy unit said in a report after Wong delivered the budget. “A strong macro backdrop, positive surprises in the fiscal buffer, and a continuing strong government commitment to reinvest and transform the economy should fuel growth in the private sector.”
DYLAN LOH
