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With its rapidly evolving technological landscape and solid government support, Singapore has emerged as a powerful fintech hub within Southeast Asia. According to data from the Singapore Exchange, the country is believed to host more than 750 entities, accounting for over 40% of all fintech companies in Southeast Asia.
The nation also boasts of a significant presence of businesses spanning various facets of the fintech spectrum, strategically emphasising specific verticals that align with its strengths in the investment and banking sectors. Looking forward, Singapore’s fintech market, which is currently valued at $7.8 bn, is expected to grow at a CAGR of 7% between 2023 and 2028, as per Mordor Intelligence.
As indicated by the International Trade Administration, the growth of Singapore’s fintech sector is propelled by several key factors. These include the expanding reach of digital financial technology, the swift embrace of online payment systems, the integration of financial services into various e-commerce platforms, the surge in buy-now-pay-later trends, and the tightening regulations governing cryptocurrencies.
Government funding also plays a crucial role in keeping the ball rolling for the sector. On August 7, 2023, the Monetary Authority of Singapore (MAS) unveiled plans to allocate S$150 mn ($111.52 mn) over the next three years to bolster the nation’s Financial Sector Technology and Innovation Scheme. This initiative aims to cultivate collaborations advancing innovative fintech solutions rooted in emerging technologies like Web3.
“Following extensive efforts and initiatives by policymakers and regulators, FinTech in Singapore has progressed substantially from its initial days…Singapore’s FinTech space remains robust, with a broad and diverse range of FinTech operating within it,” said PwC.
How to invest in Singapore’s fintech sector?
Investors can tap into Singapore’s bustling fintech landscape by engaging with the nation’s fintech-based stocks. Highlighted below are three such prospects.
iFAST Corporation
iFAST Corporation, headquartered in Singapore, is a worldwide digital banking and wealth management platform. The company also delivers an array of investment offerings and services, catering to financial advisory firms, financial institutions, banks, and multinational corporations, in addition to serving retail and high-net-worth investors.
iFAST Corporation’s net income fell by 62% year-on-year to S$11.6 mn ($8.62 mn) in 2022. During the same period, the company’s revenue shrank by 3.4% to S$208.9 mn ($155.32 mn). Additionally, iFAST’s profit margin was reported at 5.6%, down by 14% from a comparable period in 2021.
Listed on the Singapore Exchange (SGX: AIY), iFAST has a market capitalisation of $1.27 bn. The company’s stock has risen by 36.53% in the past year. It has a PE ratio of 170.29 and a forward PE ratio of 57.14. The stock has a price-to-book ratio of 7.45.
Grab
Grab, a multinational technology company headquartered in Singapore, serves as the creator of a comprehensive super-app offering transportation, food delivery, and digital payment services via mobile devices.
Incorporated within Grab’s fintech offerings are payment solutions, insurance services, micro-investments, and financing opportunities tailored to serve consumers, micro-entrepreneurs, and small businesses.
The company’s operations span across countries, including Singapore, Malaysia, Cambodia, Indonesia, Myanmar, the Philippines, Thailand, and Vietnam. In 2022, Grab witnessed a substantial 125% increase in its revenues, reaching $1,433 bn compared to the previous year. The full-year adjusted EBITDA demonstrated a 6% improvement, albeit still at a negative $793 mn. Notably, the loss for the year showed a significant reduction of 51%, amounting to $1.74 bn.
Traded on the US Nasdaq (NASDAQ: GRAB), the firm holds a market capitalisation of $14.15 bn. Over the last year, the company’s stock has experienced a decline of 2.67%. Its PE ratio stands at a negative 7.83, and it maintains a price-to-book ratio of 2.18.
“The outlook for growth (of Grab Holdings) this year looks promising, with the potential for a strong 2H recovery despite employee-related costs, but cuts will establish a more competitive cost base long term,” writes Angus Mackintosh of CrossASEAN Research who publishes on Smartkarma.
Silverlake Axis
Silverlake Axis functions as an investment holding firm that delivers digital economy software solutions and services to a diverse range of industries, including banking, insurance, payment, retail, and logistics.
The company’s net profit expanded by 25% year-on-year to RM 182.7 mn ($39.96 mn) in the fiscal year ended March 2023. During the same period, the company’s revenue decreased by 68% year-on-year to RM 736.5 mn ($161.11 mn).
Silverlake Axis stocks are listed on the Singapore Exchange (SGX: 5CP). The company has a market capitalisation of $546.67 mn. Since last year, the company’s shares have fallen by 30.12%. Along with that, the shares have a PE ratio of 14.07 and a price-to-book ratio of 2.49.
Editor’s note: All stock movement figures as of August 9, 2023.
