Days before Prime Minister Lawrence Wong unveils Budget 2026 on 12 February, Singapore’s equity market finds itself in an unusual position: riding a stellar 2025 rally whilst simultaneously confronting existential questions about its long-term competitiveness. For high-earning professionals navigating portfolio allocations in January 2026, the parliamentary clash between the ruling People’s Action Party (PAP) and the Workers’ Party (WP) over equity market reform offers more than political theatre; it’s a window into whether Singapore’s S$1 trillion stock market can truly become an investable asset class or remain a structural afterthought.
The Straits Times Index (STI) delivered a jaw-dropping performance in 2025, clocking 28% total returns; its strongest showing in at least a decade. Deputy Prime Minister Chee Hong Tat revealed in Parliament that “the average daily traded value of securities on SGX grew more than 20% year-on-year to almost S$1.8 billion in November 2025,” whilst IPO activity rebounded to S$2.4 billion, the highest since 2019. SGX’s market capitalisation breached the S$1 trillion threshold, and retail participation surged to a four-year high.
Yet beneath this momentum lies a sobering reality that Workers’ Party MP Louis Chua laid bare in his 3 February adjournment motion titled “Make Singapore Equities Great Again.” MP Louis, an equity analyst by profession, presented damning comparative data: “As of end-January 2026, 61% of SGX companies generated return on equity below 8%, compared to 44% in Japan and 24% in Korea.” More alarmingly, only 14 SGX-listed companies achieve daily trading volumes above US$20 million, versus 305 in Japan, 172 in Korea, and 160 in Hong Kong.
The PAP government’s centrepiece response is the Equity Market Development Programme (EQDP), which has allocated S$3.95 billion across nine asset managers from a total S$5 billion war chest. Speaking at Parliament, DPM Chee emphasised a philosophy of building capabilities rather than forcing outcomes: “We are not trying to go for a silver bullet that can, on its own, solve all the problems. There is no magic pill. We are also not trying to ‘force’ outcomes through quotas or administrative allocation.”
The strategy rests on three guiding principles: effective implementation, calculated risk-taking with guardrails, and continuous adaptation. MAS established an Equity Market Implementation Committee co-chaired with SGX, whilst modernising market infrastructure and launching the SGX–Nasdaq Global Listing Board, enabling eligible companies to dual-list with a single prospectus later this year.
For professionals weighing SGX exposure, the government’s approach offers tangible liquidity support. The number of stocks trading at least S$1 million daily has risen 40% to 100 since the Review Group’s formation in August 2024. The STI’s five-year total returns now exceed 100% in Singapore dollar terms, outperforming many regional peers.
Yet MP Louis Chua and Associate Professor Jamus Lim argue current measures “may be necessary but not sufficient to truly drive permanent change.” Their critique centres on structural deficiencies: “The two workstreams appear to be focused on reducing market friction, rather than instituting structural interventions that improve company fundamentals in the long term.”
MP Louis pointed to Japan’s March 2023 Tokyo Stock Exchange directive requiring companies to disclose “management conscious of cost of capital and stock price”—not a voluntary guideline, but a structured framework with monthly compliance tracking. Within a year, over 90% of Prime companies disclosed initiatives, with high-quality disclosers outperforming peers by meaningful margins. Korea’s February 2024 Value-Up programme similarly mandates quantified ROE and ROIC targets, expanded directors’ fiduciary duties, and enforceable accountability.
MP Louis’s most pointed criticism targets the “value unlock” programme’s S$30 million grant: “For the vast majority of companies, they can very much maintain the status quo… Companies face no additional disclosure or regulatory requirements to demonstrate how exactly they are going to drive higher shareholder returns.”
The enforcement gap compounds this. Despite SGX rules requiring director and CEO remuneration disclosure since January 2023, only 68% complied by December 2024. MP Louis wryly noted: “Without consequences for non-compliance, why would companies comply? And it is hard to blame companies for refusing to comply, after all, the stewards of our national reserves, Temasek and GIC do not have mandatory remuneration disclosures at all.”
For Singapore’s affluent cohort—those pulling in S$200,000-plus annually and seeking diversification beyond property and foreign equities; this debate has portfolio implications. Research cited by Chua reveals that 69% of Singapore-listed companies shrank in market capitalisation over the past decade, compared to just 14% in Japan. Only 11% of SGX firms doubled their market cap in ten years versus 50% in Japan.
The government’s voluntary approach may suit patient institutional investors with deep research capabilities, but retail and HNW individuals lack resources to separate wheat from chaff amongst 600-plus listings. Japan and Korea’s mandatory disclosure regimes effectively outsource fundamental screening to regulatory frameworks—a public good that Singapore’s laissez-faire approach foregoes.
Crucially, the shift towards a disclosure-based regime (streamlining prospectus requirements, consolidating listing reviews under SGX RegCo) prioritises “time-to-market” for issuers but potentially dilutes investor protection. Chua referenced the 2022 Noble Group case, where MAS imposed a S$12.6 million penalty after years of investigation—“noticeably disproportionate to the billions investors lost alongside the company’s downfall.”
Neither side has fully addressed how US-China decoupling and potential tariff escalations under a second Trump administration could redirect capital flows. Singapore’s neutrality and strong Singapore dollar have attracted inflows as “global investors rebalance and diversify across Asia,” per DPM Chee. Yet if trade tensions force companies to restructure supply chains, SGX could either benefit from ASEAN manufacturing relocations or suffer if Chinese firms delist to avoid regulatory crossfire.
The PAP-WP divide isn’t binary. The government’s S$5 billion commitment and infrastructure modernisation provide liquidity scaffolding—essential but insufficient. The WP’s calls for mandatory ROE/ROIC targets, enhanced enforcement, and Korea-style accountability address the corporate governance vacuum that has plagued SGX for decades.
A hybrid approach seems optimal: deploy EQDP capital to maintain momentum, whilst phasing in mandatory value-up disclosures over 18-24 months. The MAS committee reviewing the Code of Corporate Governance presents an ideal vehicle—though its effectiveness hinges on whether recommendations carry teeth or remain aspirational.
For investors, the 2025 rally offers an exit liquidity window to trim overweight positions built during the pandemic lows. Selectively increasing exposure makes sense only if Budget 2026 signals willingness to adopt WP-style reforms.
Watch for three indicators on 12 February:
Enhanced penalties for disclosure breaches
Timelines for mandatory capital efficiency reporting
Measures tying EQDP renewals to portfolio company governance improvements.
Singapore’s equity market has spent two decades as the financial centre’s underachieving sibling—overshadowed by derivatives, FX, and wealth management. Whether 2026 marks genuine rehabilitation or another false dawn depends on policymakers’ appetite to complement capital deployment with regulatory backbone. As Louis Chua aptly warned: “Without three critical additional pillars, we risk repeating a familiar pattern.”
The ball is in Lawrence Wong’s court.
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