Investment mandates and revitalising Singapore’s local stock exchange

Parliamentary Question by Mr Liang Eng Hwa:

To ask the Prime Minister and Minister for Finance whether the Government will review its investment mandates with GIC to consider the suggestion from some industry players for GIC to allocate part of its investments to securities listed on the Singapore Exchange to revitalise our local stock exchange.

Parliamentary Reply by Second Minister for Finance, Mr Chee Hong Tat:

Mr Speaker, GIC’s mandate is to preserve and enhance the international purchasing power of Singapore’s reserves. That means two things.

First, to enhance the value of Singapore’s reserves, GIC’s investment decisions aim to achieve good long-term returns for Singapore. That remains GIC’s main focus. GIC must therefore continue to make professional investment decisions, and the Government should not direct or interfere with GIC’s investment decisions. 

Second, to preserve the international purchasing power of the reserves, especially for crisis needs, GIC invests in a globally diversified portfolio that reflects the availability and attractiveness of global investment opportunities and asset classes. 

The Government will continue to find ways to improve the attractiveness of our local equity market, but directing GIC to invest in locally listed companies is not the solution. Doing so will compromise our objectives for setting up GIC, which is not beneficial for Singapore and Singaporeans. Under our current arrangements, GIC can already invest in appropriate Singapore companies if these companies have a global footprint and generate good returns for GIC’s portfolio.

Sir, a more sustainable way to develop the local equity market is to first have a pipeline of good companies to list on SGX. In addition to anchoring international enterprises which bring new ideas, technology and good jobs, we will continue to groom and develop local companies. Some of these companies will have the potential to list locally. In 2022, we established funds to support growth enterprises and prepare them for IPOs here in Singapore when the opportunity arises, such as the Anchor Fund @ 65. These funds have invested in nine companies to date, and they are working closely with the portfolio companies to prepare them for IPO on the SGX. 

Another priority is to help more companies which are listed on the SGX to grow their operations and expand into overseas markets. By becoming globally competitive and having a larger international presence, these companies would become more attractive to global investors. We have implemented schemes to support business innovation, transformation and internationalisation, to help Singapore-based companies develop their capabilities. 

Sir, the Government remains open to new ideas and measures to improve our equity market and support business growth. We will continue to work with industry stakeholders on this goal.