Why It Matters

A capital idea for start-ups

SGX and Nasdaq said on Wednesday that they are exploring the demand among corporates for a concurrent or sequential listing on both exchanges.
PHOTO: ST FILE

A recently announced tie-up between the Singapore Exchange and Nasdaq should come as welcome news to the start-up and tech community here, as it signals easier pathways to capital markets soon.

SGX and Nasdaq said on Wednesday that they are exploring the demand among corporates for a concurrent or sequential listing on both exchanges.

SGX chief executive Loh Boon Chye said the move makes sense, given today's "borderless" business landscape.

"Fast-growing Asian companies looking to tap the capital markets can choose to list on SGX on Asian home ground, and embark on a listing on Nasdaq as they expand their business globally," he noted.

The move could also help to boost SGX's attractiveness as a destination for capital-raising.

A number of Asian start-ups, including home-grown unicorns Sea and Razer, have recently chosen to launch their initial public offerings elsewhere. Sea has filed a registration statement for a proposed IPO on Nasdaq, while Razer is said to be targeting an IPO in Hong Kong soon.

The collaboration with Nasdaq is the latest in a series of steps that SGX has taken to explore ways to attract more listings to local shores.

Earlier this year, it began seeking public feedback on whether to allow dual-class shares, which give certain shareholders disproportionately more voting rights. It is a system favoured by start-ups whose founders want to hold on to control over their firms, even as they go public.

It has also signed agreements with partners such as a unit of the Agency for Science, Technology and Research to give selected tech companies better access to capital.

If the collaboration with Nasdaq does achieve the stated aims, it would be a boon for members of the start-up community, which could get a dual listing in two tech hubs at the same time. It would also be good news for investors, who can look forward to a more lively stock market.

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A version of this article appeared in the print edition of The Straits Times on October 20, 2017, with the headline A capital idea for start-ups . Subscribe