Taking ‘overly prescriptive approach’ in encouraging startups to list locally may stifle growth: gov’t

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\u003Cp\u003E\u003Cstrong\u003EThe number of Singapore’s IPOs and proceeds raised has been declining since 2021.\u003C/strong\u003E\u003C/p\u003E\n\u003Cp\u003EThe Ministry of Trade and Industry (MTI) said taking an “overly prescriptive approach” to encourage local listing amongst startups may impede their growth plans.\u003C/p\u003E\n\u003Cp\u003E“By making government support to promising start-ups conditional on a local listing, we may end up imposing a rule that may be at odds with the growth plans of the company or the founder,” Minister of State and Minister of Trade and Industry, Alvin Tan, told the Parliament.\u003C/p\u003E\n\u003Cp\u003ETan also underscored that global investors that are in Singapore will ultimately determine how to allocate their capital based on their strategies and how they view the market. \u003C/p\u003E\n\u003Cp\u003E“If we prescribe that they must invest certain amounts in only locally listed companies, we will effectively constrain their investment mandates and end up losing a larger pool of investors that adopt a regional or global view,” Tan said.\u003C/p\u003E\n\u003Cp\u003EThe trade minister also explained that companies considering public listing have “several commercial objectives in mind.”\u003C/p\u003E\n\u003Cp\u003E“First, they may decide to list in jurisdictions where they can secure the best valuations for their shareholders. For quite several companies, a US listing is attractive due to the US’ deeper pool of investors and liquidity,” Tan said.\u003C/p\u003E\n\u003Cp\u003E“Second, companies may list in jurisdictions that give them better exposure to key target markets. For example, a company planning to expand its business in China may choose to list in either Hong Kong or China, or both,” he added. \u003Cbr /\u003E\n \u003C/p\u003E