New measures are in place to make it easier for companies to launch share issues to bolster their finances during the coronavirus crisis.
They include suspending the entry of firms at financial risk into the watch list and enhancing the share issue limit for mainboard companies so that they can raise funds more easily.
The Singapore Exchange Regulation (SGX RegCo) said yesterday: "Covid-19 has caused a drastic global deterioration in business conditions for all companies, with many experiencing significant loss of revenue and profitability.
"Share prices have also fallen, translating to sharp declines in market capitalisation. Companies are also likely to face liquidity crunch at this time as banks are tightening credit."
Companies are usually placed on the Singapore Exchange's watch list after three years of losses or when their market capitalisation falls below $40 million.
But SGX Regco, the exchange's regulatory arm, said placing firms on the watch list now might cause "undue prejudice to companies in navigating the business challenges in this climate".
SGX RegCo will also provisionally suspend half-yearly reviews, which are conducted on the first market days of June and December to see which companies should go on the list.
"The suspension is to enable our (companies) to focus on meeting the current business and economic challenges and dealing with any resultant liquidity crunch," it said.
Firms that meet certain criteria under the listing rules will continue to be able to exit the watch list.
SGX RegCo will also enhance the share issue limit for mainboard firms so that they can accelerate fund-raising efforts.
This will allow companies to seek a general mandate for an issue of pro rata shares and convertible securities of up to 100 per cent of their share capital, an increase from the 50 per cent threshold now. The enhanced limit took effect yesterday and will be in force until Dec 31 next year.
Companies intending to raise funds using the enhanced limit must seek shareholder approval either via a general mandate at the annual general meeting (AGM) or get specific approval at an extraordinary general meeting.
The limit is also subject to conditions such as the board's confirmation that it is in the interests of the firm and shareholders.
The Securities Investors Association (Singapore) welcomed the move, with president and chief executive David Gerald saying: "It enables the issuers to raise funds to keep alive their business. This is good for not only the companies, but also their shareholders.
"We also note the enhancement of the general mandate to 100 per cent obtained from shareholders at the AGM or general meetings. This will enable the issuers to raise funds expeditiously to meet liquidity needs."
