Will Singapore face more delistings in H2?

An analyst noted that SGX’s new delisting rules won’t do so much.

SGX delistings are expected to continue in the second half of this year even at higher prices, according to a Bloomberg poll. Furthermore, the report noted that the rule change doesn’t affect the persistently low valuations which continue to plague the Singapore market.

“New rules will not entirely derail the trend of delistings in Singapore. In fact delistings may continue at a similar rate,” said Nirgunan Tiruchelvam, head of consumer equity at research firm Tellimer Research.

The Straits Times Index is trading at one-year forward price-to-book ratio of 1.13 compared with 1.71 for the MSCI Asean Index, according to data compiled by Bloomberg.

Taking listed firms private has been a key theme in Singapore’s equity market over the past few years as major shareholders, institutional investors and industry peers buy companies due to low multiples. Fourteen companies are undergoing privatisation or in the process of being bought out this year, the highest number since 2016, according to a report from DBS Group Holdings.

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