Delistings and survival of the fittest mark today's equities sector

MUCH is sometimes made of the fact that companies continue to express their desire to voluntarily delist from the local market.

In recent months, for instance, Teckwah Industrial, Perennial Real Estate and SK Jewellery have submitted exit applications. This, together with a relatively small number of new listings in recent years, is often used by critics to highlight the supposed unattractiveness of the Singapore Exchange (SGX) as a listing destination.

The number of exits from SGX in 2018 and 2019 was 24 a year (or an average of two a month). This compares with 18 initial public offerings (IPOs) in 2018 and 11 in 2019. So far, in 2020, the average number of delistings has remained roughly the same at two a month while there have been just seven entrants. Seen in isolation, these numbers appear to validate the critics' stand and suggest a problem that needs urgent addressing. Numbers, however, rarely tell the whole story.