Singapore IPOs lag Asian peers as homegrown companies rush to list abroad

Cross-border listings ballooned 300% in volume compared to domestic flotations which surged 64%.

With a growing number of Singapore companies choosing to list abroad, the number of cross-border listings ballooned 300% in terms of volume and 166% in terms of value compared to the 64% increase in domestic capital raising, according to a report by law firm Baker McKenzie.

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The Hong Kong GEM has emerged as the top destination for local companies seeking outside listings after accounting for two-thirds of total number of issues from Singapore with market experts attributing the close proximity of Hong Kong to China’s massive market diminishing Singapore’s attractiveness.

Overall IPOs by Singapore issuers ballooned 78% YoY to raise U$459m in the first half of 2018 although this represents weaker activity compared to their Asian counterparts. The 12 listings in Singapore, which indicates a 20% YoY increase, also represents a gradual decline in number of listings in the last ten years, Baker Mckenzie observed.

The lion city is also losing out on profitable tech companies as gaming technology company Razer chose to list in Hong Kong last year. Less than eight months after delisting from SGX, OSIM International relisted as V3 Group in the Asian financial hub.

As a result, Singapore has been steadily rolling out programmes to boost the competitiveness of the local bourse and lure tech companies to list.

Also read: Is Singapore failing in its bid for Asia's IPO market?

SGX recently teamed up with the Tel Aviv Stock Exchange to get technology and healthcare companies to list on both exchanges by providing assistance during the pre-listing stage, facilitating the listing process and providing post-listing support. It also partnered with IMDA to ease the IPO launch process of high-tech startups early last year as well as forging an agreement with Nasdaq to enable companies to list on both venues.

“The tie-up, which comes as the two exchanges grapple with a decline in new listings, would help Asian companies first list in Singapore as a springboard and then ease smoothly to the Nasdaq as they expand globally,” Baker McKenzie added.