SINGAPORE – Some Singapore-listed companies may be looking forward to a better year in the stock market in 2026 after
getting a shot in the arm
to strengthen investor engagement and enhance shareholder value, said market watchers.
The $30 million Value Unlock initiative provides two grants, the Equip Grant and Elevate Grant, to help firms to improve their corporate strategy, optimise capital and step up on their investor relations.
It was announced in November, along with other measures, as part of efforts to revive the local stock market.
Mr Joey Choy, a principal investment specialist at Phillip Securities, said with this support, companies can communicate better with investors and share their growth story and plans clearly with them.
Investors will thus understand a company better, and will be more confident about investing in it, he noted, adding “that’s how we rebuild interest in the local stock market”. Until this happens, many companies continue to trade below their true value or what they are actually worth, Mr Choy said.
When a company’s share price is below its book value, or its assets net of liabilities, it means investors are paying, say, $5 for a stock that is worth $10.
Ms Emily Choo, chief executive of investor and public relations firm Gem Comm, calls this the “good company, bad stock” syndrome.
“Strong operational performance does not automatically translate into share price appreciation,” she added.
There are 614 companies listed on the mainboard and the Catalist board of the Singapore Exchange (SGX) as at Dec 18.
The mainboard is for larger, more established companies, while the Catalist board is for small and medium-sized enterprises and growth companies.
A check by The Straits Times found that 353, or 57 per cent, of the 614 companies are trading at a price-to-book, or PB, ratio of less than 1, which means these companies are trading below their book value.
A company’s stock may trade below book value because the markets have underappreciated its growth potential. This could happen if it is in a business that is not well understood by investors.
Unlocking that value therefore means the company’s true worth gets recognised and its stock price goes up.
Ms Chua Jen-Ai, equity research analyst at Julius Baer, believes that the Value Unlock programme would yield the biggest impact among the small and mid-caps.
She added that shareholder returns here could be sub-optimal because the interests of controlling shareholders, for instance in family-owned companies, may not be aligned with those of minority shareholders.
