Singapore offers $55m to bring in more tech IPOs

Tech companies aiming for an IPO stand to get financial help from the Singapore government if they opt to list in the city-state.

The Monetary Authority of Singapore (MAS), the country’s central bank, is launching a set of grants worth S$75 million (US$55.4 million) to help enterprises float on the Singapore Exchange (SGX) and enhance the quality and availability of equity research.

SGX Centre, Singapore / Photo credit: tang90246 / 123RF

The Grant for Equity Market Singapore (GEMS) scheme will launch next month and is set to run for three years. It consists of the Listing Grant, the Research Talent Development Grant, and the Research Initiatives Grant.

Businesses, including those from overseas, will be able to apply for the Listing Grant under three tiers, with GEMS co-funding:

• 70 percent of eligible listing expenses up to S$1 million (US$739,000) for “new technology sector” enterprises (working in areas including fintech, digital consumer tech, on-demand services, and gaming services and peripherals) with a minimum market cap of S$300 million (US$222 million)
• 20 percent of eligible listing expenses up to S$500,000 (US$369,000) for “high-growth sector” enterprises (including digital clusters, hubs, and related services, advanced manufacturing, logistics, urban solutions and infrastructure, and healthcare, as defined in 2017’s Committee on the Future Economy report) with a minimum market cap of S$300 million
• 20 percent of eligible listing expenses up to S$200,000 (US$148,000) for enterprises from all other sectors, with no minimum market cap required.

The Research Talent Development Grant is available to Singaporean businesses seeking to hire, train, and retain investment researchers and related professionals. For businesses that get the grant, GEMS will cover 70 percent of the salaries for fresh graduates hired as equity research analysts. It will also shoulder 50 percent of the salaries for experienced equity research analysts who are re-hired.

MAS hopes that this will lead to enhanced research coverage which, “particularly for mid and small-cap enterprises, can help improve investor knowledge, which will in turn facilitate price discovery and liquidity,” the agency said in a statement.

Under the third GEMS component – the Research Initiatives Grant – MAS will set aside capital to “crowdsource initiatives that will propel the development of Singapore’s equity research ecosystem,” the agency said. Examples of eligible initiatives could include “publication of industry or sector primers” and “innovative ways to distribute research and disseminate enterprise information to investors,” it added.

Currency converted from Singapore dollars. Rate: US$1 = S$1.35