Take bold steps to attract firms to list on SGX

It is worrying that while Singapore remains a major financial hub, our stock exchange seems to have lost its shine over the years.

There were fewer initial public offerings (IPOs) on the Singapore Exchange (SGX) in the first half of this year (Fewer IPOs on SGX, but cautious optimism prevails; July 6).

The SGX is also trailing behind regional competitors such as the Ho Chi Minh Stock Exchange and Indonesia Stock Exchange in terms of the number and value of the IPOs.

While SGX remains an attractive exchange for real estate investment trusts (Reits) to list, many tech start-ups have chosen to list on other stock exchanges. Recent examples include Sea and Razer, which both have strong connections to Singapore.

In addition, SGX has also fallen behind regional competitors in Hong Kong, South Korea and Taiwan in terms of market capitalisation.

Even though SGX has recently increased its attractiveness to tech start-ups seeking to list by allowing companies with dual-class share structures to have a mainboard listing, there is more that it can do to increase its appeal.

For instance, it could reduce listing fees. Mainboard-listed companies here face listing fees of $100,000 to $200,000, which is much higher than the $26,000 to $113,000 charged by the Hong Kong Stock Exchange. It could also work with brokerage houses to reduce commission rates to heighten daily trading volumes and increase the appeal of SGX to retail investors.

With the rise in e-commerce and technology, many start-ups have emerged in South-east Asia, and some will eventually go public.

SGX should take bold steps to attract some of these companies, especially those with ties to Singapore, to list in the Republic instead of choosing to raise capital in other markets.

Chan Kai Yan

A version of this article appeared in the print edition of The Straits Times on July 09, 2018, with the headline 'Take bold steps to attract firms to list on SGX'. Print Edition | Subscribe