SGX should revive its IPO 'upsizing' strategy

ALMOST 10 years ago in July 2005, the Singapore Exchange (SGX) announced a bold, rebranding strategy aimed at attracting larger companies to list in the Republic.

Its head of listings back then borrowed a term from fast-food chain McDonald's, saying the goal was to "upsize" its companies because "larger companies tend to attract institutional investment and these are the sort of investors that tend to have more long-term holding power plus they are more strategic in their investment planning" ("SGX gears up to fight the competition", BT July 18, 2005).

No firm target was set for desired company size, but a ballpark market capitalisation of at least S$300 million was mentioned. "Bigger is better" was seen as the way forward because the majority of listings in the early part of the decade had been small, obscure firms whose offerings had suffered the ignominy of undersubscription and whose amounts raised from listing, net of fees and expenses, were so paltry that many questioned the wisdom of listing in the first place.