Temasek, GIC urged to juice up Singapore bourse via SPACs: sources

[SINGAPORE] Singapore is planning new measures to boost its domestic stock market, said sources.

State investment giant Temasek Holdings' 65 Equity Partners Holdings, with a fund size of at least S$1 billion, will invest in Singapore and regional mid-cap firms, including initial public offerings, the sources said.

Temasek and sovereign wealth fund GIC will be urged to use the city-state's new framework for blank-cheque companies to encourage or facilitate the listing of tech firms in their portfolios, the sources said, requesting anonymity ahead of a formal announcement this week.

The Monetary Authority of Singapore is also involved in the effort, with the capital markets regulator planning to add to some of its existing measures, one of the sources said.

An effort to ramp up domestic investments by Temasek and GIC could help bolster Singapore's local bourse, which has struggled in recent years with tepid listings and low liquidity. A paucity of tech names - one of the hottest themes in global equity markets since the pandemic began - has also affected investor interest in Singapore's capital markets.

Singapore Exchange this month presented rules for the listing of SPACs in an attempt to get a slice of what has become a worldwide frenzy. The move is expected to draw in listings from industries, including technology.

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Dominated by old-economy sectors such as finance and property, the benchmark Straits Times Index has returned an annualised 6 per cent over the past five years in US dollar terms, about half of the broader MSCI Asia Pacific Index's gains.

While local investments made up 24 per cent of Temasek's S$381 billion portfolio as of March 31, much of that is tied up in monoliths such as Singapore Airlines and Singapore Telecommunications.

"The emergence of innovative, growth companies in Singapore and the region will present opportunities for capital solutions to support their expansion," Temasek said in an e-mailed response to Bloomberg queries.

"Temasek and its network of partners can be providers of catalytic capital, particularly in the areas of the longer-term structural trends we have identified: digitisation, sustainable living, longer life spans and the future of consumption."

The Ministry of Trade and Industry, MAS, GIC and Singapore Exchange declined to comment.

Temasek's Tan Chong Lee is helping to lead 65 Equity Partners, which will also have a remit that goes beyond Singapore as needed, the sources said. Both it and a UK entity - 65 Equity Partners Management (UK) - were formally established earlier this year, according to regulatory filings in Singapore and the UK.

Sovereign wealth fund GIC is estimated to have US$545 billion in assets under management, according to the Sovereign Wealth Fund Institute. Its mandate has traditionally prevented it from investing domestically, except in rare examples, where the vast majority of revenues are generated from outside Singapore such as logistics provider GLP and Esco Lifesciences Group.

BLOOMBERG