At least 5 Chinese firms eye SGX to expand in Southeast Asia as trade tensions drag on
SINGAPORE: Over the next 12 to 18 months, at least five firms from mainland China and Hong Kong are eyeing the Singapore Exchange (SGX) for initial public offerings (IPOs), dual listings, or share placements, according to four sources, as Chinese companies look to grow their presence in Southeast Asia amid ongoing global trade tensions.
Sources said a Chinese energy firm, a healthcare group, and a biotech group based in Shanghai are among those eyeing an expansion in the city-state; however, they did not name the companies as the plans are still in the early stages, Reuters reported.
The potential listings are expected to help SGX, which has been trying to attract mega listings and raise its trading activity. In 2024, SGX hosted only four IPOs, while rival Hong Kong Stock Exchange saw 71 new listings.
In April 2024, Vasu Menon, OCBC's managing director of investment strategy, said SGX would need to work harder and think of innovative ways to attract good IPOs . IPO activity had slowed over the past two years due to aggressive interest rate hikes by central banks. While signs of recovery were starting to show, uncertainty still hung over the IPO market. See also British are going to pay dearly for one day of fun
Jason Saw, head of CGS International Securities' investment banking group, said Chinese companies are now looking to tap into Singapore as they expand their business in Southeast Asia amid the trade war with the U.S.
Earlier, the U.S. raised tariffs on Chinese goods to 145%, and China responded with tariffs of 125% on U.S. goods. While both sides agreed to a 90-day pause, uncertainty remains, especially with the unpredictable policies from the Trump administration.
Mr Saw said listing enquiries on SGX 'shot through the roof' since the latest U.S. tariff moves against China.
Pol de Win, senior managing director and head of global sales and origination at SGX, said gateways connecting China to the rest of the world will matter even more in the years ahead.
He said, 'Singapore is an important gateway, whether it's trade (or) business activity from China to the outside world, and a listing in Singapore is an important part of that,' although he did not comment on the listing plans involving the Chinese and Hong Kong firms.
Mr Saw said CGS International, a unit of China Galaxy Securities, is now working with at least two Chinese companies that may list in Singapore as early as this year. Still, it did not mention the company names.
One source said some of the firms could raise about US$100 million through primary listings in the city-state.
While Hong Kong remains the top choice for most Chinese firms listing offshore, some are now showing more interest in SGX as Beijing works to deepen ties with Southeast Asia, according to capital market advisers.
To strengthen its equities market, the Singapore government announced a 20% corporate tax rebate for primary listings, a 10% rebate for secondary listings, and a S$5 billion market development program . These measures resulted in a notable uptick in IPO enquiries , said Ooi Chee Keong, a partner at Forvis Mazars, in March. Additional support measures will be introduced in the second half of 2025 .
Ringo Choi, EY's Asia Pacific IPO Leader, said Singapore's political stability and neutral stance on global issues make it attractive to companies. Still, few expect Singapore to catch up to Hong Kong in equity listings anytime soon because of its more cautious investor base and stricter listing requirements.
A managing director at a Singapore-based multinational software company told Reuters that Singapore needs to make it easier for companies, especially tech firms, to list. He said most startups in the region are based in Singapore, so it should be the place they list. /TISG
Read also: Regional and domestically exposed sectors replace US export-oriented stocks in RHB's Top 20 Small Cap Jewels 2025
Featured image by Depositphotos (for illustration purposes only)
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