SINGAPORE - The Singapore Exchange (SGX) is teaming up with the New York Stock Exchange (NYSE) to dual-list companies, allowing them to tap capital markets outside their home regions.
The move will also help to expand the variety of listings available on the SGX at a time when trading volumes have fallen on the back of greater market volatility.
SGX, known for being the exchange of choice for real estate investment trusts and other yield-focused companies favoured by long-term investors, saw its daily average traded value decline by 8 per cent year on year to $1.2 billion in the first half of 2022, its data showed.
SGX group chief executive Loh Boon Chye and NYSE president Lynn Martin signed a memorandum of understanding on Friday (July 22) to draw more dual listings, develop new products in the environmental, social and governance (ESG) space, and list more exchange-traded funds (ETFs).
Mr Pol de Win, SGX's head of global sales and origination, said the exchange expects to see more Chinese companies listed in the United States seek alternative listings in Singapore.
One example is Chinese electric vehicle maker Nio, which listed on the SGX in May. It is also listed in the US and Hong Kong.
Mr de Win added that there is a larger number of technology companies based in South-east Asia that have developed to a stage where they are ready to seek initial public offerings in Singapore and the US.
"We expect a higher proportion of these South-east Asia companies in the new economy to list. This is what is exciting for investors and will draw meaningful capital inflows to Singapore," he said.
There are around 30 companies from various sectors and countries with secondary listings on the SGX with a combined market value of $270 billion, according to bourse data.
These include brandy and whisky company Emperador, healthcare provider IHH Healthcare, property developer Hongkong Land, grocery chain Dairy Farm International, and glove makers Sri Trang Gloves and Top Glove.
Besides Nio, fund manager AMTD International is also listed in the US.
Mr de Win added that the two exchanges will also collaborate to bring more thematic ETFs to market for passive investors, including ESG-themed ETFs.
"It is still early days for ESG in Asia and there is a lot we can learn from NYSE's experience in this space," he said.