Can Singapore regain allure, as more of the city's companies flock to Hong Kong for IPOs?
Hong Kong's vast lead over Singapore as a listing venue appears unassailable, with even the Southeast Asian city's home-grown companies heading north to raise funds, but the city state remains determined to improve its allure, according to bankers and analysts.
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IFBH, a Singapore-incorporated Thai firm that is the world's second-largest bottler of coconut water, started trading on the
Hong Kong stock exchange on Monday after completing a HK$1.16 billion (US$147 million)
initial public offering (IPO) . The bottler of the If brand had planned to list in Singapore but
changed course and applied in Hong Kong in April, citing strong connectivity with mainland China, its most important market.
IFBH's debut in the city followed that of Mirxes, a Singaporean biotechnology company that raised HK$1.09 billion and saw its shares surge 28.8 per cent on the first day of trading on May 23.
The Singapore Exchange (SGX) recorded just one IPO this year, raising US$4.5 million, while the Hong Kong stock exchange raised US$13.2 billion through 38 deals, according to data from the London Stock Exchange Group. Last year, SGX had four deals totalling US$34.2 million, compared with Hong Kong's US$11.3 billion from 67 deals.
IFBH and Mirxes underline the valuation upside and deep liquidity in Hong Kong's stock market, which has a market capitalisation of US$6.5 trillion – up 37 per cent from a low point last September – and a daily trading volume of around US$30 billion. Meanwhile, Singapore's stock market is worth about US$488 billion and has a daily trading volume of about US$1.1 billion.
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Despite US-China trade tensions driving some Chinese firms to expand in Southeast Asia and consider listings in Singapore, analysts said the impact on Hong Kong's appeal as a listing venue remained minimal.
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