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Jan 16, 2019

Singapore set to launch radical grant system for companies wanting to list

Most generous funding is for new-technology enterprises

The Monetary Authority of Singapore (MAS) is launching a set of grants worth S$75 mn ($55 mn) to help companies float on Singapore Exchange (SGX) and enhance the quality and availability of equity research.

The Grant for Equity Market Singapore (Gems) scheme will launch on February 14 and run for three years.

‘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,’ says MAS assistant managing director Ng Yao Loong in a statement. ‘Results from our private market initiatives and bond grant schemes have been encouraging.’

Gems has three parts: the first is the listing grant to facilitate listings on SGX by co-funding IPOs. This will be allocated according to the category of company listing.

The most generous funding exists for enterprises in the new-technology sector with a market capitalization of at least S$300 mn, providing a strong indication that this is the type of company Singapore wants to attract to list on SGX. This sector includes companies in financial technologies, consumer digital technologies and on-demand businesses such as gaming services and peripherals. Gems will co-fund 70 percent of eligible listing expenses, capped at S$1 mn.

For enterprises in high-growth sectors with a market cap of at least S$300 mn, Gems will co-fund 20 percent of listing expenses, capped at S$500,000. This sector includes advanced manufacturing, hub services, logistics and healthcare.

For enterprises from all other sectors, Gems will co-fund 20 percent of listing expenses, capped at S$200,000. No minimum market cap is needed.

The second element is the research talent development grant, which is designed to create a pipeline of equity research analysts and retain experienced research talent in an effort to push research coverage primarily of small and mid-cap listed enterprises.

The grant will co-fund 70 percent of the salaries for fresh graduates hired as equity research analysts, and 50 percent of salaries for re-employed experienced equity research analysts.

The research initiatives grant makes up the third part of Gems. It will fund crowdsource initiatives that will help drive the development of Singapore’s equity research ecosystem. Such initiatives include the publication of industry or sector primers and innovative ways to distribute research.

‘Gems will help strengthen Singapore’s position as the go-to venue in Asia for enterprises seeking growth financing,’ says Ng.