Shifting tides: Lion City lures Hong Kong investors

SINGAPORE: The financial scene in Singapore is changing as more and more Hong Kong investors see the city-state as a refuge from regional unpredictability. The Singapore Exchange (SGX) is capitalising on this trend by putting significant market reforms and initiatives into place. A recent DBS Treasures Affluent Investor Survey, released in July 2025, found that 27% of affluent investors from Hong Kong and mainland China are now thinking about diversifying their portfolios by purchasing Singaporean stocks. The political stability of Singapore, sometimes referred to as the "Switzerland of the East," and its growing significance as a gateway to Southeast Asian markets are significant considerations. The city-state has put in place alluring incentives in an attempt to attract companies and investment. The central bank of Singapore announced a 20% tax refund for primary listings in February 2025 as one such measure. Singapore is making a strong case for itself with tax incentives and business-friendly policies that are drawing interest from regional investors. In a media release, Amy Kwan, Head of Business Planning, Customer Segment and Ecosystem, Consumer Banking Group & Wealth Management, DBS Bank (Hong Kong) Limited, said, “Affluent investors are demonstrating strong confidence, resilience and adaptability when navigating a complex economic environment. They are seeking global investment opportunities to diversify their investment portfolios. "The findings reaffirm that communications with trust relationship managers for a holistic investment advice is essential and important, especially among those with higher investable assets, despite many already leveraging digital tools when making investment decisions. Affluent investors are also investing beyond the borders." The strategy used by SGX goes beyond standard market stimulation. Singapore's central bank's $5 billion Equity Market Development Programme (EQDP) run by its central bank is a concerted attempt to revitalise the stock market from a number of perspectives. Important tactics the central bank has announced include:

1. Drawing in Secondary Listings: Singapore Depository Receipts (SDR) are being introduced by SGX to increase trading options and target foreign companies for listings in Singapore.
2. Strengthened Research Projects: With an emphasis on cutting-edge industries like artificial intelligence, healthcare, and novel business models, the exchange is developing comprehensive research coverage for possible IPO candidates.
3. Education for Investors: More information about new investment opportunities and attention to lesser-known stocks are being provided by proactive efforts.

Thanks to strong earnings results from important Temasek portfolio companies like DBS Group Holdings and Singtel, the Straits Times Index (STI) has also reached all-time highs. There are still issues, though, because roughly 85% of trading turnover is made up of the top 30 STI component stocks. The ongoing trade tensions between the United States and China have increased Hong Kong investors' interest in Singapore. At least five Chinese or Hong Kong-based businesses are getting ready to make dual listings or initial public offerings (IPOs) on the SGX within the next 18 months, indicating growing confidence in Singapore's market potential. With 63% of investors prioritising tech-driven opportunities, the technology and innovation sectors are especially alluring. However, SGX's head of equities, Ng Yao Loong, stresses a practical approach. In an interview with The Edge Singapore, he shared: "They are all well-meaning, but we know that these measures have to be self-reinforcing, such that the liquidity flywheel can start turning. Liquidity begets liquidity on its own, but sometimes it is quite difficult." The SGX aims to create a self-reinforcing liquidity ecosystem. This will pull in more investment through transparency, equity, and strategic partnerships. It won't directly challenge Hong Kong's historical dominance in share sales. Rather, Singapore seeks to establish a place for stable, income-producing companies that cater to Southeast Asia. The city-state is working to establish itself as a strong, forward-thinking finance centre in light of the continuous global unpredictability. Only the upcoming months will see whether these initiatives can result in a long-lasting shift in the local investment climate.