Why Hong Kong investors are turning to Singapore

Singapore’s appeal as a financial safe haven is evolving into something more proactive—and more strategic. For affluent investors from Hong Kong and mainland China, it’s no longer just about shelter from volatility. It’s about where their portfolios can grow with structure, stability, and credible governance.

New data from the July 2025 DBS Treasures Affluent Investor Survey shows that 27% of these investors are eyeing Singapore-listed equities as a diversification play. That shift reflects both push and pull: regional tension continues to drive capital out of Hong Kong, while Singapore is making deliberate policy moves to welcome it.

Known for its political neutrality and regulatory consistency, Singapore has now added stronger market incentives to the mix—including a 20% tax rebate for primary listings announced in early 2025. That rebate is part of a wider suite of capital market reforms designed to support depth, liquidity, and investor access.

The 20% tax refund unveiled by the Monetary Authority of Singapore (MAS) isn’t a short-term boost. It’s part of a broader effort to strengthen the fundamentals of the local equity market. The refund applies to qualifying primary listings and sits within the framework of the $5 billion Equity Market Development Programme (EMDP), which MAS launched to promote equity financing as a viable capital path.

Beyond tax relief, the EMDP includes co-investments in research coverage, support for investor education, and liquidity-enhancing mechanisms. Together, these reforms are designed to reduce structural friction for companies listing in Singapore—and build confidence among investors evaluating new opportunities beyond the STI heavyweights.

This is less about competing with Hong Kong’s scale and more about creating a differentiated value proposition: predictable income-yielding listings, clear tax treatment, and investor protections within a well-regulated exchange.

One key gap MAS and SGX are addressing is informational depth. While most trading on the Singapore Exchange remains concentrated in a small set of large-cap stocks, the next wave of listings will likely come from mid-sized firms in growth sectors. That requires better research coverage and broader investor literacy.

Efforts are already underway to expand institutional coverage for new and upcoming IPO candidates—particularly in sectors like AI, green technology, healthcare, and digital platforms. These efforts are not just about supply; they’re about market confidence. For investors to rotate capital into less familiar names, they need trusted data, professional analysis, and investor education that goes beyond index performance.

This education layer is especially important for cross-border investors who may be unfamiliar with SGX norms or regulatory expectations. MAS is positioning Singapore as a transparent, accessible, and governance-forward listing environment—not just a low-tax alternative.

Another strategic shift is the push to develop Singapore Depository Receipts (SDRs), which offer international companies a channel to establish secondary listings in Singapore without relocating primary operations.

The SDR framework reflects Singapore’s intention to expand its investment universe without compromising listing standards. For investors, this means access to more global names through a regulated local platform. For companies, it provides regional exposure while tapping into Southeast Asia’s capital base.

SDRs may not deliver headline IPO numbers, but they serve a different function—expanding investor choice and enhancing market vibrancy. For Chinese firms seeking geopolitical diversification, SDRs offer a practical bridge into ASEAN markets under Singapore’s legal and institutional umbrella.

Even before these reforms take full effect, the Straits Times Index (STI) has been buoyed by strong earnings from established players like DBS Group Holdings and Singtel—both core holdings in Temasek’s portfolio.

But while STI performance has been robust, the underlying challenge remains: market activity is still heavily concentrated in just 30 stocks. SGX knows that the goal isn’t just performance at the top—it’s breadth and depth across the board. That’s where the current policy strategy is focused.

SGX Head of Equities Ng Yao Loong has cautioned that liquidity doesn’t follow announcements alone. In recent remarks to The Edge Singapore, he emphasized that market volume must be self-reinforcing. The reforms being introduced aim to do just that—by ensuring both supply (more listings) and demand (better-informed investors) grow in tandem.

The capital shift toward Singapore is unfolding against a backdrop of lingering uncertainty in Hong Kong and mainland China. Ongoing tensions with the US, shifting regulatory environments, and unclear long-term investor protections have prompted many wealthy individuals and corporates to hedge their exposure.

Singapore offers an attractive contrast: an open capital regime, currency stability, and a reputation for policy transparency. For firms planning IPOs, the city-state’s positioning as a financial and legal gateway to ASEAN is an added draw. And for individual investors, the opportunity to tap Southeast Asia’s growth through a rules-based market is increasingly compelling.

At least five Hong Kong- or China-based companies are reportedly preparing to list or dual-list on SGX in the next 18 months. That momentum reflects more than market timing—it reflects a recalibration of regional capital strategies.

Notably, 63% of surveyed investors in the DBS study identified technology and innovation as their top sectoral priority. This dovetails with Singapore’s broader economic strategy to anchor its capital markets in future-oriented sectors.

Whether through listing support, research, or investor outreach, SGX is trying to build the infrastructure for a durable pipeline of growth companies. But this requires time. The temptation to chase volume must be balanced against listing quality, governance standards, and long-term investor alignment. Singapore’s edge may lie not in being first—but in being most prepared for the next phase of regional capital evolution.

For Singapore-based retail and institutional investors, the reforms signal an opening up of the equity landscape. While the STI has long been the default entry point, new listings, secondary offerings, and expanded research may create space for a more diversified and forward-looking portfolio.

But investor patience is critical. Market reform doesn’t create depth overnight. The next one to two years will test whether Singapore’s equity market can move beyond legacy names and build a broader bench of investable companies.

Watch for signs: more listings, wider coverage, and sustained earnings growth outside the top tier. That’s where the success of the current reforms will truly show.

Singapore is not attempting to replace Hong Kong as Asia’s dominant exchange. Its ambition is more focused: to offer a credible, stable, and long-term equity platform tailored to Southeast Asia’s growth and international capital’s need for clarity.

The reforms are cohesive—linking tax, listings, education, and research—but they are also realistic. Singapore isn’t betting on headlines; it’s designing for durability. What unfolds next will depend on execution, not incentives. But for now, the direction is clear: Singapore’s capital markets are moving with intent, not urgency—and that’s the deeper signal.