The Singapore stock exchange has reached its lowest number of listed companies in 20 years.

The Singapore Exchange has excelled in developing robust markets for bonds, derivatives, and real estate investment trusts but has faced challenges in achieving similar growth in initial public offerings.

The number of companies listed on Singapore’s stock exchange has reached its lowest level in 20 years, with only four companies going public in 2024 and several delistings. This decline has prompted the city-state’s regulator to investigate measures to reverse the trend.

By October, the Singapore Exchange (SGX) listed 617 companies, a significant drop from its peak of 782 in 2013. This reduction is partly due to domestic companies favoring larger markets like the US for listings. For example, Shein, a Chinese fast-fashion firm headquartered in Singapore since 2022, is considering a London listing with a potential £50 billion valuation. Major Singaporean firms, including Grab and Sea, have also chosen New York for their IPOs.

Despite growth in private capital inflows, a burgeoning family office sector, and robust bond and derivatives markets, SGX has struggled to replicate this success with IPOs. Over the summer, the Monetary Authority of Singapore (MAS) initiated a review of the equity market. The review panel, comprising representatives from SGX, MAS, and Temasek, aims to recommend strategies by next August to boost fund manager participation, ease regulatory requirements, and attract more companies to list.

Investment bankers predict that 2024 might mark a turning point, with several IPOs in the pipeline despite challenges like global political uncertainties. However, IPO activity in Singapore this year has been minimal, with just four companies listing on SGX’s junior Catalist market, collectively raising only $31 million.

Singapore’s challenges mirror global trends, as markets like London also face competition from the high valuations in the US. Across Southeast Asia, IPO activity has been subdued, but countries like Malaysia and Indonesia outpaced Singapore significantly in both the number and value of listings.

Suggestions to boost local IPO activity include allowing Singapore’s Central Provident Fund to invest more in the domestic stock market, potentially creating new capital inflows. However, analysts remain skeptical about such reforms, with some downgrading SGX’s outlook due to concerns that the MAS review may not achieve its goals.