SGX growing in appeal for foreign firms looking to list

The Singapore Exchange ranks ninth in a survey from PwC of 370 executives from companies across the globe on which exchanges they think issuers will consider beyond their home exchange in 2030 for an IPO.
The Singapore Exchange ranks ninth in a survey from PwC of 370 executives from companies across the globe on which exchanges they think issuers will consider beyond their home exchange in 2030 for an IPO.ST PHOTO: KELVIN CHNG

Companies looking to list outside their home countries are becoming more inclined to see Singapore as an ideal destination for an initial public offering (IPO).

A new survey from PwC noted that while New York, London and Hong Kong remain the top picks, bosses felt that by 2030, the increasing strength of the South-east Asian economy will lure more firms here.

The poll, which was conducted by the Economist Intelligence Unit, quizzed 370 executives from companies across the globe for their views on the factors that are shaping the development of equity capital markets. It follows up from a 2011 report.

Respondents were asked which exchanges they think issuers will consider beyond their home exchange in 2030 for an IPO.

Singapore Exchange (SGX) was cited by 15 per cent, up from the 11 per cent who favoured the SGX if an IPO was to be staged now. The 11 per cent also marked a 5 percentage point rise from the same question in the 2011 survey, when executives were asked about current attractiveness of exchanges.

Overall, SGX ranked ninth for the 2030 prediction.

Mr Tham Tuck Seng, capital markets leader at PwC Singapore, said: "We expect that SGX's reputation as the most international exchange will remain intact, given its pro-business approach.

STRONG FUNDAMENTALS

We expect that SGX's reputation as the most international exchange will remain intact, given its pro-business approach. Together with the country's stable political landscape, transparent regulatory environment and the relatively low volatility of the Singapore dollar, it gives companies good reasons to consider listing on the SGX.

MR THAM TUCK SENG, capital markets leader at PwC Singapore, on Singapore Exchange's attractiveness to foreign firms as an initial public offering destination.

"Together with the country's stable political landscape, transparent regulatory environment and the relatively low volatility of the Singapore dollar, it gives companies good reasons to consider listing on the SGX."

The latest survey also highlighted the change in sentiment from 2011, when respondents predicted that the Shanghai Stock Exchange would lead by 2025, followed by the New York and Indian exchanges and Brazil's Bovespa.

Mr Ross Hunter, PwC Global IPO Centre leader, said excessive optimism about emerging markets has been tempered by political and market realities: "Expectations are now for a more closely run race between developed and emerging market exchanges."

Liquidity remained the top priority - cited by 49 per cent - when choosing a listing location. There is also an increase in the focus on valuations (32 per cent) and concern about the costs of listing (29 per cent).

PwC anticipated that technology will continue to be a significant driver in the future of public companies. Increasing efforts by leading financial centres to win over technology and "new economy" firms will continue to intensify the competition between the New York and China (including Hong Kong) exchanges in particular, it added.

A version of this article appeared in the print edition of The Straits Times on March 14, 2019, with the headline 'SGX growing in appeal for foreign firms looking to list'. Print Edition | Subscribe