SINGAPORE (BLOOMBERG) - Singapore's reign as the premier destination for initial public offerings in South-east Asia has come to an end.
Its exchange had the smallest haul of new share sales among the region's four largest stock markets in 2015. Listings this year on South-east Asia's biggest bourse have totalled US$34 million (S$45.9 milion), lagging behind Thailand and Malaysia.
Singapore's slide down the IPO rankings reflects not so much its own failings, but the growing ability of rivals from Jakarta to Bangkok to convince local issuers to stay at home instead of flocking to the regional hub.
Indonesia, which has South-east Asia's biggest population and largest economy, plans to start an exchange dedicated to young technology companies, while Thailand's premier has highlighted the importance of the country's capital markets.
"The smaller South-east Asian exchanges have been promoting themselves as a listing venue," said Mr Pankaj Goel, co-head of South-east Asia investment banking at Credit Suisse Group.
"It makes sense for Indonesian companies to list in Jakarta and for Thai companies to list on Thailand's stock exchange."
Singapore's decline in new listings adds to the challenges faced by Mr Boon Chye Loh, who became chief executive officer of Singapore Exchange in July and has been trying to restore confidence in a market where turnover hasn't recovered from a mystery penny-stock crash in 2013.
Companies that listed last year in Singapore raised US$366 million, according to data compiled by Bloomberg, its worst performance since 2001. The amount was less than 10 per cent of funds raised from Thailand's IPOs, just a third of Malaysia's and half of Indonesia's, the data show.
Of the 13 IPOs in Singapore in 2015, four were from foreign companies - two Malaysians, one Chinese and one Israeli. In 2010, 10 foreign companies from China, Indonesia, Malaysia and Norway were among the 31 listing debuts in the city state.
Globally, companies have raised US$14.5 billion from IPOs in 2016, a 67 per cent plunge from the same period last year, according to data compiled by Bloomberg.
"The competition is not so much between one exchange and another but ensuring that there are enough listing-ready candidates," said Ms Lee Suet Fern, managing partner at law firm Morgan Lewis Stamford.
The Indonesia Stock Exchange is trying to persuade local companies listed in Singapore as well as foreign natural resources firms operating in its country to list in Jakarta. The push is part of an effort to become South-east Asia's biggest stock exchange within five years, CEO Tito Sulistio said in February. He is also asking for rule changes to enable IPOs for real estate trusts and more state-owned enterprises.
The Philippine Stock Exchange has been pitching to multinational companies with operations in the country, according to PSE president Hans Sicat. Phoenix Semiconductor Philippines Corp, a unit of South Korea's STS Semiconductor & Telecommunications Co, debuted in Manila in 2014.
Malaysian companies including palm oil producer Felda Global Ventures Holdings Bhd, billionaire T Ananda Krishnan's Astro Malaysia Holdings Bhd and IHH Healthcare Bhd, Asia's biggest hospital operator, chose to list at home in recent years, said Bursa Malaysia Bhd CEO Tajuddin Atan.
It's not just the big local companies that Malaysia is attracting.
Bursa Malaysia in July tweaked its listing rules to boost its attractiveness and cut compliance costs, said Mr Tajuddin.
In Thailand, local companies raised the most in South-east Asia in the past three years after its stock exchange introduced rules for listing infrastructure funds, said Mr Santi Keranand, head of the issuer marketing division at the Stock Exchange of Thailand. Such projects accounted for about 45 per cent of the amount raised from IPOs since 2013, he said.
Vietnam's Hanoi Stock Exchange touts its regulated over-the-counter market UpCom for companies not ready to list on the main exchange, said Mr Nguyen Anh Phong, the bourse's deputy CEO. The number of companies on UpCom is expected to increase by 12 per cent to 300 by the end of the year, he said.
The country's larger bourse, Ho Chi Minh City Stock Exchange, is working with the regulator to boost investor access and get the nation upgraded to emerging market status, said Mr Le Hai Tra, deputy CEO. Having a "large number" of state-owned companies seeking a listing means a strong IPO pipeline, Mr Tra said. Vietnam leads the regional pack in 2016 with 35 companies raising just over US$170 million.
Singapore will continue to be relevant as a listing destination, said Mr Michael Wu, an analyst at Morningstar in Hong Kong. The island's pro-business regulatory environment, political stability and robust currency makes it an ideal place for issuers and investors, he said.
"The growth of South-east Asian bourses is positive as it benefits the region, making us collectively a more vibrant capital market," said Mr Chew Sutat, head of equities and fixed income at SGX.
Mr Chew pointed to the US$115 billion in debt raised by companies on the Singapore bourse last year and a new initiative to help firms not ready for an IPO secure funds. Foreign issuers accounted for 83 per cent of the debt raised in 2015, according to the Singapore Exchange.
Despite that trend, on the stock-listing side there appears to have been a substantive shift.
"The age-old view that there are only three main hubs in Asia, Hong Kong, Tokyo and Singapore will probably not be the same in the future," said Philippines' Sicat.