Singapore needs more diverse, high-growth listings given large-cap dominance: panellist
‘The key to the ecosystem is more listcos,’ says Dr Li Xiaowei of Fullgoal Fund Management
Singapore requires a broader spectrum of innovative, high-growth companies to list on its stock exchange in order to reduce the dominance of large-cap companies, claims Dr Li Xiaowei, deputy general manager and chief investment officer at Fullgoal Fund Management. During a panel discussion at CGS' China-Asean Business Leaders Summit, Dr Li emphasized the need for unique investment opportunities that set Singapore apart from competitors in Southeast Asia and China.
The current state of the Republic’s market is heavily influenced by its large-cap dominance, with the Straits Times Index (STI) accounting for 80% of the total market capitalization. In comparison, China's CSI 300 Index makes up 50% of its market cap. Additionally, Singapore's stock market liquidity is significantly lower than China’s, with STI constituents trading at 10 times the rate of the Next 50 Index, while Chinese stocks in the CSI 300 offer twice the liquidity compared to mid-cap indices.
The lack of industry diversity in Singapore is partly to blame, with nearly 60% of the STI comprised of the financial sector, whereas Chinese large-cap markets boast a more diverse range of industries. Dr Li highlighted that Singapore’s stock exchange has taken steps to address this issue through the Equity Market Development Programme (EQDP), which aims to stimulate and transform the market.
However, SGX’s Cai acknowledged that EQDP, while an important initiative, is not a definitive solution and that further measures such as the Value Unlock programme will be necessary to truly catalyze growth. Singapore is still in the early stages of this journey, having just launched EQDP in 2025.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
