S-chip listings to make their comeback: Deloitte

AUDIT and consulting firm Deloitte expects China listings to make their comeback here over the next few years, although investor confidence in this scandal-hit sector needs to be rebuilt first.

Dr Ernest Kan, Deloitte's chief of operations for clients and markets, said in a briefing on Tuesday that his firm is already working with "no more than 10" China companies looking to list in Singapore. These firms include those in energy and resources, real estate and life sciences and healthcare, he said, and they could hit the market next year or in 2015.

Bankers and accountants are rubbing their hands in anticipation of more initial public offering (IPO) business from China after a "direct listing framework" set up between Singapore and Chinese regulators last month.

The Singapore Exchange (SGX) will work with the China Securities Regulatory Commission (CSRC) to vet new listings, which could help thaw a freeze in IPOs from "S-chips", or Chinese firms listed here.

The last time there were significant S-chip listings was in 2010, a dramatic slowdown after these companies led the IPO market from 2005 to 2007.

Dr Kan said that Singapore's development as an offshore yuan centre could aid the local market.

But the lack of investor confidence here remains an obstacle towards S-chip listings, after a number of accounting and governance scandals at such firms in recent years.

"With the about 140 S-chips, a number of them are good companies," said Dr Kan. "If those good companies can have an impact on the market... then I'm hopeful that Chinese companies can come back in a big way."

He noted that the rebuilding of confidence "will probably take some time".