Why a delisting makes sense for Sim Lian

THE proposed delisting of Sim Lian Group by its founders may serve as yet another reminder of the meandering state of the Singapore bourse, which has seen or is seeing the exit of household names such as healthy-lifestyle products group OSIM International and traditional Chinese medicine (TCM) group Eu Yan Sang.

What is poignant in the case of the long-listed property construction and development group is that it is seen as largely driven by a persistent undervaluation and poor trading liquidity of its stock, unlike its industry peers Popular Holdings and SC Global which had been taken private to avert paying hefty penalties on residential properties. None of Sim Lian's residential projects are subject to qualifying certificate (QC) conditions, which require extension charges to be paid for unsold residential units two years after the project's completion.

But one would argue that the merits of staying listed for companies such as Sim Lian have paled vis-a-vis the costs of listing, which could be anything between half a million and a million Singapore dollars annually.