“The STI represents only a portion of our listed companies, and investor interest in the next tier is growing — partly driven by the EQDP (equity market development programme),” says Chee. “This new index will provide a useful lens to track how the next tier of large and liquid companies are evolving — whether through business model transformation, improved governance or stronger capital management initiatives.”
Over time, Chee adds that he hopes to see more indices covering areas such as corporate governance and sustainability. This creates a virtuous circle and will generate “positive momentum for the entire market”.
Delivering greater shareholder value via visibility and clarity
In his speech, Chee also noted that investors are looking beyond headline earnings and, as such, Singapore companies can and must do more to deliver greater shareholder value.
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Today’s investors are “far more sophisticated”, and as such, strong revenue growth and healthy earnings, while necessary, are “often insufficient” in today’s landscape.
“[Investors] want to understand your growth story, not just your current performance,” he says. “They want visibility on capital allocation, clarity on long-term strategy and confidence that management is committed to creating value.”
He adds that to capture investors’ attention, companies must now articulate their growth story. Going beyond standard financial reporting, companies must also present a “compelling narrative” of how today’s actions will translate into tomorrow’s success.
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CEOs must be the face of the company
Among the initiatives to help companies unlock value, the review group believes C-suite executives and board directors will have to be proficient in “corporate strategy, capital optimisation, investor engagement and media outreach” beyond financial management.
“Corporate leaders need to focus on strategic priorities beyond day-to-day business operations — they must actively develop long-term plans and think about value creation with the shareholders in mind,” says Chee.
He adds that this often requires a mindset shift including for founder CEOs because “leading a public listed company is different from helming a private company”.
With this in mind, CEOs must be the face of the company, Chee continues, citing examples such as Microsoft’s Bill Gates, Nvidia’s Jensen Huang, DBS’s former CEO Piyush Gupta and his successor, Tan Su Shan.
But this cannot rest on the CEO alone. The entire leadership team must also be equipped. For instance, chief financial officers (CFOs) also play a critical role. They should go beyond producing accurate financial statements, to weaving these numbers into a “persuasive narrative”.
Communications key
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In a world where investors have a lot of choices, actions, while louder than words, aren’t enough. Companies must now be able to show and share their vision.
“This is an important part of building trust and earning the confidence of our stakeholders and partners,” says Chee.
He adds that listed companies need to put themselves forward with finetuning and communicating strategic plans, holding regular investor engagements and making their growth story accessible.
Like companies in overseas markets, local listcos should also share their views on their firms’ outlook and prospects.
On concerns about potential legal exposure when companies provide such information, Chee says the MAS will review how to “provide greater clarity” on its regulatory framework to “facilitate open communication while upholding market integrity”.
