Singapore investors favour overseas stocks over domestic market

Singapore's investment community demonstrates a curious contradiction: retail and institutional investors show considerable appetite for foreign equities while remaining cautious about homegrown stocks listed on the Singapore Exchange. The disconnect has drawn attention from SGX leadership as the bourse seeks to strengthen its position as a capital-raising hub in Asia.

Koh Boon Hwee, chairman of the Singapore Exchange, has flagged this investor sentiment as a key challenge for the local market. The reluctance to invest domestically, despite willingness to assume risks in international markets, points to deeper concerns about market liquidity and the sustainability of share valuations post-listing.

For early-stage investors and company founders, confidence in achieving liquidity through an SGX listing remains critical. Without assurance that shares will trade actively following an initial public offering, potential issuers may opt to pursue listings elsewhere or seek alternative funding sources. This dynamic threatens to undermine Singapore's ambitions as a regional financial centre capable of nurturing and capitalising on homegrown enterprises.

The challenge reflects broader trends affecting equity markets across Asia, where investors increasingly pursue diversified portfolios and readily access international exchanges. Reversing this trend will require the SGX to demonstrate sustained market depth, attract quality listings, and rebuild investor confidence in local equities as viable long-term investments.