The year 2024 marked a pivotal period for Southeast Asia’s two major stock exchanges—Bursa Malaysia and the Singapore Exchange (SGX)—as they navigated contrasting fortunes in the equity and derivatives markets. While Bursa Malaysia celebrated a record-breaking year for IPOs, SGX leaned on derivatives growth to sustain its market position. Here’s a comparative look at their performance and strategies:
1. Initial Public Offerings: Bursa’s Record-Breaking Year vs. SGX’s Decline
Bursa Malaysia
- Performance: Bursa registered 55 IPOs in 2024, its highest in 19 years, exceeding its guidance of 42 IPOs.
- Breakdown: 11 listings on the Main Market, 40 on the ACE Market, and four on the LEAP Market.
- Future Outlook: Bursa forecasts 60 potential IPOs in 2025, driven by a robust pipeline of investment banking deals.
- Significance: IPO growth is critical for Bursa’s equity market turnover, boosting investor confidence.
Singapore Exchange (SGX)
- Performance: SGX saw only four IPOs in 2024, its worst performance since 2011.
- Challenges: SGX faced a stagnant market with low equity liquidity and more delistings than IPOs.
- Recovery Efforts: The Monetary Authority of Singapore has launched an equities market review group to revive the market, focusing on attracting listings and enhancing investor participation.
2. Market Turnover and Trading Volumes
Bursa Malaysia
- Equity Turnover: Bursa’s average daily value (ADV) for equity trades is projected to increase from RM3.04 billion in 2024 to RM3.29 billion in 2025.
- Net Profit Growth: Bursa is expected to achieve 7.1% net profit growth in FY2025, following a stronger 20.4% growth in FY2024.
- Diversification: Bursa has introduced fractional shares trading and launched new products like edible oil derivatives to expand its offerings.
Singapore Exchange (SGX)
- Equity Turnover: SGX’s total securities market turnover climbed 5% to $20 billion in December 2024, with the benchmark Straits Times Index (STI) rising 16.9% over the year.
- Derivatives Focus: SGX reported record derivatives trading volumes, with 298.4 million contracts traded in 2024, an 18% year-on-year increase.
- Key contributors include FTSE China A50 Index Futures (+17% YoY) and iron ore and petrochemical benchmarks.
3. Strategic Initiatives and Innovation
Bursa Malaysia
- Strategic Roadmap (2024-2026):
- Product Expansion: Introduction of thematic ETFs, relaunch of single stock futures, and renewable energy certificates (RECs).
- Ecosystem Development: Onboarding corporates into sustainability data platforms.
- Customer Experience: Upgrading support systems to enhance query resolution.
- New Ventures: BR Capital, a debt fundraising platform, helps small- and mid-sized companies access alternative capital pools.
Singapore Exchange (SGX)
- Liquidity Initiatives: SGX announced plans to explore ways to improve liquidity, with the equities market review group set to publish findings in 2025.
- Derivatives Growth: SGX expanded its dominance in futures markets, particularly with FTSE Taiwan Index Futures (+11% YoY) and China A50 Index Futures, driven by global investor interest in Asian equities.
4. Stock Performance and Investor Sentiment
Bursa Malaysia
- Stock Price: Shares closed at RM8.70 on January 10, up 19% over the past year.
- Target Price: CGSI raised Bursa’s target price to RM11.30, citing robust IPO momentum and projected ROE growth from 31.4% (2023) to 38.3% (2026).
Singapore Exchange (SGX)
- Stock Price: Shares closed at $12.15 on January 10, up 23% over the past year, benefiting from strong derivatives growth and STI gains.
- Challenges: Equity market stagnation and low IPO activity remain concerns despite STI’s 17-year peak in December 2024.
5. Key Takeaways
- Bursa Malaysia is emerging as a leader in IPO activity, leveraging innovation and diversification to bolster its equity market.
- Singapore Exchange, while facing equity market challenges, has cemented its position as a global derivatives hub, driven by record-breaking futures and commodities volumes.
- Both exchanges are adapting to changing market dynamics, but Bursa’s IPO-led equity market growth contrasts with SGX’s reliance on derivatives expansion.Thank you
