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MAS plans to boost stock market by subsidising listing expenses, analyst salaries — will it work?

Ben Paul
Ben Paul1/23/2019 07:11 AM GMT+08  • 9 min read
MAS plans to boost stock market by subsidising listing expenses, analyst salaries — will it work?
SINGAPORE (Jan 21): It seems perfectly logical that a country that uses monetary subsidies to encourage its citizens to procreate would adopt a similar policy in order to boost the production of stock research. So, I don’t know why I was surprised to le
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SINGAPORE (Jan 21): It seems perfectly logical that a country that uses monetary subsidies to encourage its citizens to procreate would adopt a similar policy in order to boost the production of stock research. So, I don’t know why I was surprised to learn this past week that the Monetary Authority of Singapore plans to subsidise the salaries of analysts, in order to ensure better coverage of small, locally listed companies and “facilitate price discovery and liquidity” of their shares.

The subsidy is part of a new $75 million grant that MAS plans to launch in February. Dubbed the Grant for Equity Market Singapore, the three-year initiative is to help enterprises raise capital in the local stock market. One component of GEMS is a “listing grant”, where MAS will foot 20% of a company’s listing expenses, up to a cap of $200,000. Companies in certain “high growth” sectors will have 20% of their listing expenses co-funded, up to a higher cap of $500,000. Companies involved in “new technology” sectors — including financial technologies, consumer digital technologies, on-demand services as well as gaming services and peripherals — will have a more generous 70% of their listing expenses covered, up to an even higher cap of $1 million.

MAS will also earmark funds to crowd-source initiatives to spur the development of Singapore’s equity research ecosystem. Such initiatives can include publication of industry or sector primers as well as innovative ways to distribute research and disseminate enterprise information to investors. On top of that, MAS will also co-fund 50% to 70% of the salaries of locals employed as equity research analysts. “The research talent development grant is designed to groom a pipeline of equity research analysts and retain experienced research talent to initiate research coverage primarily of listed mid- and small-cap enterprises,” MAS said in a statement on Jan 14.

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