“When we were doing the review for the equities market, we consulted widely and heard from different industry stakeholders. Our consultations point to a clear gap — Singapore companies can and must do more to deliver greater shareholder value,” he said.
In his September speech, Chee listed three key elements which should help companies unlock shareholder value. These were: to help companies build stronger capabilities, encourage listcos to communicate, and have them build communities and foster collaborative networks to unlock value.
At DBS’s event, Gearing Up for 2026 on Oct 22, Chee, who is also the deputy chairman of the Monetary Authority of Singapore’s (MAS) board of directors and chairman of the review group, said more details of the programme will be unveiled in November.
Grants for investor relations activities
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Ahead of the announcement, Paul Chew, head of research at PhillipCapital, believes the government will provide grants for companies to conduct investor relations activities, as well as new social or mainstream media platforms to engage investors. The programme may also help guide listed companies in their communication strategies and value creation efforts, as well as introduce indices of companies with improving corporate governance of capital management initiatives.
Ultimately, Chew hopes for an “easier journey” for retail investors to “understand and appreciate” the investment merits of a small- and mid-cap company.
He acknowledged the need for communication given the “limited access” today. “There are typically just a handful of annual reports, a few slides, and the brief interaction with management once a year,” he says.
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Terence Wong, CEO of Azure Capital, agrees. “Many of these smaller companies may not have that kind of support or may not think of having proper investor relations.”
While the newer small-caps are more likely to recognise the need for a proper communications strategy, he observes that many of the older companies, those that have been listed for many years, are less receptive to the need for investor relations. As such, he hopes that the programme will include grants for these companies to tap into. The programme could also arrange outreach sessions for these companies to provide them with proper guidance on communicating with the investing community, he says.
Having good communications will also benefit the market, Wong adds, as it should help companies’ share prices move closer towards their net asset values (NAVs).
“If you close the gap, there’s also a lesser chance … of them delisting. People would recognise the value of the company and companies would justify their valuation as a listed company,” says Wong.
Christopher Forbes, head of CMC Markets’ Asia business, also believes the November announcement will unveil capacity-building toolkits with grants and structured guidance for listed companies. “Too many Singapore firms still think strong earnings automatically translate to share price appreciation. That assumption is wrong. Management teams need better tools to articulate their value propositions and capital allocation strategies.”
The programme may also include enhanced investor recourse mechanisms, such as designated representative actions and co-funding for misconduct cases. “This tackles the governance concerns that have been keeping investors away from small- and mid-caps,” says Forbes.
MAS, on Oct 24, issued a consultation paper to seek feedback on proposals to enhance investors’ recourse avenues in cases of market misconduct. The consultation will close on Dec 31.
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Forbes expects the group to announce frameworks to help companies unlock their hidden balance sheet values.
“We have seen this work in Japan and Korea, where it sparked market re-ratings. These corporate actions create real trading opportunities and signal that management is serious about delivering shareholder returns,” he says.
Unlocking value
According to Forbes, the market requires “explicit incentives” for shareholder-friendly dividend policies. He says: “Singapore is known for attractive yields, but consistency varies wildly across sectors. As rates normalise and deposits flow back into equities, companies with progressive dividends or systematic buybacks will command premium valuations. That is where the smart money will flow.”
Second, Forbes proposes targeting liquidity support beyond the 30 constituents that make up the Straits Times Index (STI). While the $5 billion Equity Market Development Programme (EQDP) is aimed at lifting the profits of small- and mid-caps, Forbes says the market needs specific mechanisms, such as market-making incentives and enhanced analyst coverage requirements. “There are compelling mid-cap opportunities that suffer from poor liquidity and that deter institutional participation while creating wider spreads for retail clients.”
Finally, Forbes believes the programme should introduce clear key performance indicators with public reporting on progress. “If you require companies to disclose return on invested capital (ROIC) improvements, buyback commitments, and investor engagement scores, you create healthy competition among listed companies to demonstrate their commitment to shareholder value.”
Asset monetisations and CEO messages
Wayne Lee, executive chairman of W Capital, believes the programme should have measures encouraging companies to conduct asset monetisations, such as divesting their non-core assets. The move may result in the capital appreciation of their share prices, he says.
The programme should also encourage companies with substantial cash on their balance sheets to pay out a certain level of dividends, as hoarding cash without doing much “doesn’t make sense”.
“If you have a high level of cash over debt and yet not distributing dividends, are you using the cash to do mergers and acquisitions [M&As]? [Conversely], if you’re not using cash to do M&As or organic growth, why aren’t you distributing dividends?” he asks. “There should be a corporate review on unlocking of shareholders’ value by the boards of companies that hoard a huge amount of net cash over debt.”
Lee is also hoping to see licensed market makers inject liquidity into small and mid-cap counters, especially those with market caps of $300 million or less.
“The EQDP alone is not sufficient to prop up liquidity in the small- and mid-cap space … and the fund managers, who are supposed to invest in the small- and mid-cap space … will they take a look at small caps with market capitalisation below $300 million? If they do, how many of such counters can they invest in?
“In that sense, most Catalist counters will still be overlooked by the EQDP fund managers because they also have their own set of investment criteria in terms of market capitalisation and liquidity. If your counter is too illiquid and has a free float that is too low, these managers won’t be able to invest in them,” he adds. “In that sense, the real beneficiaries of the EQDP will be, in my view, the top 10% to 15% of the whole small- and mid-cap counters.”
The way Lee sees it, the licensed market makers will be able to provide the bid and ask spread, which allows investors to “feel safer” knowing that they can sell their shares without getting stuck.“You need liquidity of the small- and mid-caps to improve significantly via such measures to attract or make the initial public offering [IPO] market vibrant again,” he notes.
While Lee notes that IPOs are returning, the success of the bourse will depend on the liquidity of these IPO counters as well as their fundamentals. “If [these companies] have good fundamentals, coupled with the fact that there’s daily liquidity in the bid and ask spread of the counters, it’s so much easier to raise equity [through moves such as] placement shares. After all, that’s a key purpose, to keep fundraising post-IPO.”
Regarding communication strategies, Lee says companies need to engage with their investors on a continual basis. “CEOs need to have constant non-deal roadshows to meet up with institutional funds, the brokers and even some potential accredited investors to sell their company in terms of the [short- to mid-term] vision that it has?”
CEOs of companies will also have to engage their investors. Lee cites Tesla’s Elon Musk as a good example. “Musk has done it so well. Investors are buying [into his] vision of robotaxis even though it doesn’t translate to earnings at this point,” he says, noting that investors are pricing the company at hundreds of times of P/E multiples.
To him, company founders or CEOs also need to be concerned about growing their share prices in addition to driving revenue and profitability. “I’ll be very concerned if the founder or CEO of the company [tells me that he or she] only focuses on growing revenue or profits but doesn’t care about the share price fluctuations or doesn’t bother communicating his or her short- to mid-term vision and business growth prospects to its analysts, fund managers or investors.”
When asked what he would like to hear from CEOs, Lee says he’d like to know what the companies’ individual business models are about, their vision over the next five to 10 years, and how the CEO intends to execute their expansion plans.
No ‘short-change’ by cash hoard
John Cheong, head of small- and mid-cap research at UOB Kay Hian, is also hoping that the programme will address companies that hoard cash for seemingly no reason.
In his view, companies that have kept over five years’ worth of earnings should either pay out special dividends, conduct share buybacks “aggressively” or raise their payout ratio to above 100%.
“Minority shareholders should not be short-changed as the hoarding of cash has resulted in constant loss of income,” he says. “This does not only result in the loss of dividend income but also lower [their] return on equity [ROE] and lower [the companies’] share price performance over a long period of time.”
Cheong is also hoping for minority shareholders’ interests to be better protected. To him, the measures should include the encouragement and empowerment of activist shareholders who seek to enforce the interests of minority shareholders and increase, or unlock, value for shareholders.
Other items on his wishlist include continuous efforts in the form of fresh capital injections and market reforms to drive sustainable valuation rerating, attracting high-quality IPOs beyond REITs and property stocks, as well as creating indices that exclude REITs, given that there is already “ample liquidity” in that space.
Finally, the analyst hopes to see more participation from institutional shareholders in the small- and mid-cap space, especially in high- quality names. In a July 23 report, Cheong and fellow UOB Kay Hian analyst Heidi Mo identified 10 stocks that could benefit from the $1.1 billion distribution under the EQDP fund so far. Their picks include Food Empire, UMS, Frencken, Valuetronics, Oiltek, PropNex, Marco Polo Marine, Lum Chang Creations, CSE Global and Sheng Siong Group.
Increasing public float
Lim & Tan Securities analyst Nicholas Yon is hoping that the measures will address the low public float of tightly held companies. “A higher float increases liquidity, and a lot of family businesses in Singapore own [stakes of 50% and above],” he says.
The measures should also address ways to reduce nepotism within family-owned companies and encourage the hiring of professionals to manage these companies.
“Some companies have their family members installed in key positions and command a high salary for the position,” he points out. “Of course, having family members working for their family’s legacy versus a business professional will have different sets of issues, such as agency problems.”
Like his peers, Yon hopes to see more grants that will help boost liquidity and valuations, including the establishment of small family offices to encourage investments in Singapore.
That said, the analyst recognises that it could be challenging to strike a balance between measures that are useful for the public and what can actually increase shareholders’ value. For instance, a company may prefer to remain silent about its strategies to prevent sharing its plans with competitors, as this can lead to increased competition and decreased margins over a shorter period.
Regarding calls for more transparency, such as recommendations for companies to disclose analysts’ briefings publicly, Yon believes companies may no longer choose to hold such briefings and that these meetings will “no longer hold much value” as companies may opt not to reveal anything tangible or useful.
Real, measurable incentives needed
Phua Zhenghao, group head of investments and asset management at CGS International Securities Singapore, believes the “Value Unlock” programme will be most effective if it focuses on “real, measurable incentives”.
“Companies could be encouraged — even rewarded — for publishing value-up plans, improving board engagement or raising dividends and buybacks,” he says. “That might mean grant support, tax credits or even recognition through a ‘value-up’ index to highlight firms that walk the talk.
“What would really make a difference is linking this with stronger investor participation — so when companies step up on governance and capital efficiency, the market responds with liquidity and valuation support,” he adds. “That’s how reform turns into rerating.”
No compromise on regulatory standards
Market regulators must strike a balance of not compromising on regulatory standards, says Robson Lee, director of Kennedys Law. “Where relevant, listing rules and securities laws must be reformed to enhance governance standards in line with international principles of a disclosure-based regime.”
Issuers should also be encouraged to provide clearer and more frequent communications with investors as well as a greater emphasis on corporate transparency, to boost investors’ confidence and market sentiment.
Like W Capital’s Lee, Robson hopes for the programme to encourage boards to make capital allocation decisions that align with sustainable business plans and strategies, with clear directions to growth and profitability.
Andy Sim, the Singapore head of DBS Group Research, says he would like to see better disclosures, such as earnings and sales guidance from local listcos, and clearer long-term targets, such as ROE and sales, like those seen in foreign markets.
Companies should also be incentivised to participate more actively in events and outreach programmes to investors, he adds.
In addition to initiatives on transparency, investor engagement and capital management, Jayden Vantarakis, Macquarie Capital’s head of Asean equity research, is hoping that the November announcement will include the names of the investment firms that will be part of the $5 billion EQDP allocation.
Stocks that can gain from the ‘value-up’ programme
Thilan Wickramasinghe, head of research at Maybank Securities, believes that value-up reforms can strengthen the momentum observed in Singapore’s small- and mid-cap sector.
Noting that the measures so far have been mainly focused on liquidity, the analyst believes deeper reforms are needed to “address a long history of sluggish balance sheets and mixed corporate governance track records of Singapore’s small- and mid-caps”.
Referring to the reforms conducted in Japan, Korea and China, Wickramasinghe notes that Singapore could benefit from some of the lessons to unlock value. In his Oct 24 report, the analyst observes that the countries’ “value-up frameworks” are centred around three broad objectives: to enhance capital efficiency above the cost of capital, improve shareholder returns and investor confidence, and increase trans- parency and governance. “Board responsibilities have been steered towards setting and communicating time-bound targets to deliver these objectives. P/B, dividend payouts, share buybacks, returns above COE/WACC [Cost of equity/ Weighted average cost of capital] thresholds and investor dialogue have been commonly emphasised by these reforms,” he notes. “Their respective indexes are on average +25% higher after reforms versus +13% in the year leading up to them.”
“With 55% of listings on the Singapore Exchange [SGX] trading below 1 times P/B, and 46% with net cash balance sheets, the introduction of a value-up framework could have a material positive impact, in our view,” he adds.
After screening the 100 largest stocks on the SGX where cash makes up at least a fifth of their market value, Wickramasinghe has identified 33 stocks that will benefit the most from the “Value Unlock” programme.
“Guided by [the] TSE (Tokyo Stock Exchange), KRX (Korea Exchange) and CSRC (China Securities Regulatory Commission), we set the minimum value up thresholds at 1 times P/B, [over] 30% dividend payout, active share buybacks and ROE-COE/ROIC-WACC spread of at least 2 percentage points,” he says. “In our sample, we search for stocks whose indicators are just below these thresholds. We believe these companies have the shortest pathways to restructure and deliver value up — should they be propelled by greater regulatory and institutional investor attention (Table 1) … We also identify additional small- and mid-cap stocks that largely meet minimum value-up parameters. These stocks could benefit immediately should there be regulatory catalysts for greater market engagement (Table 2),” he adds.
