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SGX chases IPOs with target to double Singapore market value
[SINGAPORE] Singapore Exchange Ltd is seeking to double the market value of companies listed in the city-state as Asian bourses compete for initial public offerings.
"We should be looking to double our market cap in three to five years," Muthukrishnan Ramaswami, president of SGX, said in an interview with Bloomberg Thursday. "It will happen through listings from China, from India and from other locations. That's why we're working the pipeline."
The goal looks ambitious, with the bourse drawing just one IPO so far this year, according to data compiled by Bloomberg. China and Hong Kong have had more than 100 as policymakers add stimulus to prop up mainland growth and Chinese investors open equity accounts at a record pace, pushing valuations to multi- year highs. There are 287 overseas companies currently listed in Singapore, according to SGX.
The 776 companies on Southeast Asia's biggest bourse were valued at US$587 billion as of Wednesday, compared with US$252 billion six years ago, data compiled by Bloomberg show. The benchmark Straits Time Index advanced about 90 per cent in that period, tracking gains in regional equity markets as central banks used stimulus to revive the world's biggest economies following the global financial crisis.
SGX is betting closer ties with China and relaxed IPO rules will help it grow. The bourse and the China Securities Regulatory Commission signed a deal in November 2013 allowing mainland companies to offer shares in the city-state without having to incorporate overseas. SGX is also courting mining companies and energy-industry service providers, allowing resources firms to list without an earnings track record. The bourse offers dual-currency trading for stocks and exchange- traded funds.
Increasing competition for IPOs leads to more specialization among exchanges, Mr Ramaswami said. The Singapore bourse has established itself as a destination for real estate investment trusts, with tax incentives helping the city-state attract REITs with assets in Japan, Hong Kong and Germany, according to data compiled by Bloomberg.
"We're seeing a good pipeline," Mr Ramaswami said. "We have been working with CSRC in China as well as with several businesses that are interested to list."
For more on SGX IPOs:
- BTBlogs: More or less regulatory intervention for IPOs?
- Toyo-Thai aims for US$300m IPO of subsidiary in Singapore bourse
- Crushed limestone producer GCCP launches Catalist IPO
- LHN Holdings' Catalist IPO raises S$17m
- Hock Lock Siew: LHN IPO decent; pity there's no public portion