SGX not alone in facing delistings, privatisations

WHEN the announcement was made that the recently-delisted OSIM International was looking to relist in Hong Kong sometime in the near future, the reaction from many in the market was predictable - observers viewed it as yet another indictment of the weak Singapore market and some took the opportunity to criticise the Singapore Exchange (SGX) listing venue with an oft-used comment that the episode is a "wake up call" to the authorities to pull up their socks and do more to enhance the market's attractiveness.

Whilst it is undoubtedly troubling to see a well-known, home-grown brand name like OSIM (and the others before it in the past few years such as Eu Yan Sang) depart the local market, it is important when discussing delistings and privatisations to place the discussion in the correct perspective. This is often not done.

While there are companies contemplating switching their listing from SGX to Hong Kong because of low valuations and thin trading, there are also many Hong Kong-listed firms that are delisting from Hong Kong and switching to mainland China for exactly the same reaons - low valuations and thin trading.