27-05-2025
Drawing secondary listings to SGX may not move the needle much, but every little bit helps
AMONG the recent slew of proposals unveiled to boost the attractiveness of the local bourse to investors and companies was one relating to secondary listings.
The Monetary Authority of Singapore (MAS) proposes aligning disclosure requirements with baseline international disclosure standards, which are already commonly adopted by most established markets, including Singapore.
Specifically, these include the International Disclosure Standards for Cross-Border Offerings and Initial Listings by Foreign Issuers, as issued by the International Organization of Securities Commissions (Iosco).
In essence, these standards allow issuers who already have primary listings elsewhere to use the same prospectuses with minimal adaptation for their secondary listing on the Singapore Exchange (SGX) – a change which simplifies disclosure requirements.
Market players are in favour of the proposal, saying it will attract more companies from varied sectors, thus offering more choice to investors.
An SGX spokesperson reiterates the point: 'As an international listing venue, our role is to provide companies with seamless and broad access to capital at every stage of their growth.'
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For companies with international operations – especially those active in South-east Asia and the broader region – a secondary listing in Singapore offers a compelling opportunity to tap into the deep pools of global capital here, to broaden and diversify their investor base, and to elevate their visibility in a trusted financial hub, SGX added.
The spokesperson noted: 'We have been actively engaging companies and see growing interest from firms looking to use Singapore as a launchpad to expand their global and regional presence.'
Market sources say that sizeable firms in the tech, healthcare and new-energy sectors are eyeing Singapore as a possible destination for a secondary listing. Their market capitalisation ranges from over S$700 million to over S$1 billion.
At these market capitalisation amounts, the new joiners would be on par with the likes of steel fabricator BRC Asia and property and hotel player OUE, in terms of market sizes.
Clifford Lee, DBS' global head of investment banking, said these listings help 'diversify our equity market beyond the local bank-Reit core, to include growth areas like technology and healthcare.'
He noted that 'this could trigger a flywheel effect, under which fund managers are incentivised to develop Singapore market strategies, thus boosting trading volumes and, as a result, attracting more listings. Dual-listed stocks allow Asian investors to deal in Singapore hours and Singapore dollars, reducing foreign exchange and time-zone friction, further unlocking regional liquidity pools'.
The SGX spokesperson told The Business Times that there is a good pipeline of issuers looking at secondary listings on SGX. 'We are also in active discussion with many potential listing aspirants on their listing plans on SGX.'
For companies eyeing a secondary listing in an alternative market, the proposed rule changes are likely to give them a nudge in the right direction.
At the moment, the number of secondary listings – 28 – is a small fraction of the approximately 600 listings on SGX's mainboard and Catalist.
But they do have name recognition. Among the 28 are several long-time secondary listings, including DFI Retail, Hongkong Land, Mandarin Oriental and Jardine Matheson, all of which are part of Hong Kong's Jardine Group.
There are also relatively new – but well-known – names such as the New York Stock Exchange-listed Nio, a Chinese manufacturer of premium smart electric vehicles, and private healthcare service provider IHH Healthcare.
To James Leong, the chief executive officer of trading firm Grasshopper Asia, a company which opts for a secondary listing can 'gain access to new capital pools, increase brand recognition and generally increase liquidity and visibility for the stock. For the market, it provides interesting new products that investors may lack'.
One of the recent secondary listings on SGX is PC Partner Group, which has its primary listing on the Hong Kong Stock Exchange. It joined SGX's mainboard last November.
The global computer electronics player relocated its headquarters to Singapore 'to support and manage the group's continued business growth in South-east Asia and other regions', which points to Singapore's ability to attract capital.
The group added that it plans to leverage Singapore's advantages as a global hub of innovation and technology and to expand into the region.
Whether more such companies will follow in PC Partners' path is the question, notwithstanding reports that some interested candidates are waiting in the wings.
Grasshopper's Leong said: 'While there are definitely companies that would be interested, the decisions are typically contingent on costs and other opportunities – that is, can other markets offer the same value?'
He notes that there are many who are still heading to Nasdaq or the New York Stock Exchange, 'because of the probability of higher valuations that are possible and the immense liquidity in US markets'.
But the US market is not meant for the faint-hearted, with the many companies there clamouring for investor attention.
Given the turmoil in the markets caused by the chop-and-change strategy of US President Donald Trump, it is possible that many candidates in the region may rethink their plans and look closer to home instead.
If Singapore can capture a few more listings, be they secondary or primary listings, it cannot hurt. Every little bit helps in creating a more vibrant marketplace for investors.
