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MPA-led group aims to boost maritime listings on SGX
THE Maritime Port Authority of Singapore (MPA) is taking the lead in a tripartite working group recently formalised to promote maritime listings on the Singapore Exchange (SGX).
In formalising the working group for maritime listings, MPA - together with its two partners SGX and the Singapore Shipping Association (SSA) - is seeking to realise the ambition of building Singapore into a maritime financial hub.
Developing and promoting the ship finance sector is an integral part of MPA's goal of grooming Singapore into a leading international maritime centre, an MPA spokesman said.
Presently, there are more than 20 banks with a shipping finance portfolio in Singapore, and these are augmented by private equity arrangers and shipping finance advisers. MPA recognises the importance of complementing these sources of financing with public equity and debt to enlarge the funding pool available to a capital-intensive sector, according to the spokesman.
SSA president Esben Poulsson said Singapore hosts over 130 international maritime companies and the island nation's registry boasts about 5,000 flagged vessels.
This leaves plenty of room for growth in terms of maritime listings, taking into consideration the sector is represented by 62 counters on SGX.
Total market capitalisation of the 62 maritime listings on the Singapore bourse stood at S$45 billion as at Sept 30, 2015, according to SGX. These maritime counters comprise 14 shipyards, 12 shipping companies, three shipping-related business trusts, and 33 offshore services entities.
SGX also has close to 70 listed bonds issued by companies in the maritime cluster. Altogether, more than S$18 billion has been raised from both equity and bond markets since 2013 for Singapore-listed maritime entities, SGX added.
The formal working group will be looking into benchmarking against the current leaders in maritime listings: the Oslo Bors and the New York Stock Exchange (NYSE).
Annual reports published by Marine Money from 2007-14 rated SGX among the top bourses worldwide in total proceeds raised from equity offerings for the years 2010, 2011 and 2013.
The Oslo Bors and NYSE, however, have in general led the pack through 2007-14, with each bourse mustering total proceeds of US$1-3 billion from equity offerings alone in 2014.
Recognising New York and Oslo as traditional venues for maritime listings, MPA said Singapore nonetheless stands to leverage on the good reputation of SGX to play a role in global capital markets for the shipping and offshore sectors.
SSA's Mr Poulsson also sees a window of opportunity from a softened global maritime equity market for the Singapore bourse to gain traction in attracting more listings against New York and Oslo.
While companies in the maritime sector may have seen better times, Lee Keng Mun, a seasoned banker with HSH Nordbank AG and chair of SSA's finance working group, believes investors could look towards more potential upside from the now more attractive "asset valuations" with the sector tipped for a rebound after a downturn.
Of late, analysts have also highlighted some bright spots including the gas transportation segment, which Mr Lee concurred could be a potential source for new company listings especially with Singapore set on developing into a regional trading hub for liquefied natural gas (LNG).
MPA has supported SSA in undertaking a study to map out the recommendations on positioning Singapore as the premier maritime finance centre in Asia.
Mr Lee said recommendations in the study commissioned to global accounting and business advisory group Moore Stephens cover the entire ship finance eco-system including the ease of on-boarding for maritime counters, research and investor education, and the current listing platforms available on the Singapore bourse.
Simon Lim, SGX's senior vice-president and head of listings, South-east Asia and sectors, said the tripartite working group has already been "organising listing seminars for potential issuers as well as investor education events".