SINGAPORE (Mar 13): Apart from their own exchanges, more issuers would consider listing on the Singapore Exchange (SGX) in 2030 on the back of increasing focus on the Southeast Asian market, according to a new PwC report, Capital Markets in 2030.
In a survey of nearly 400 executives at companies from across the globe, the report found that 15% of issuers would consider listing on SGX in 2030 – placing it at ninth place.
SGX is expected to overtake Deutsche Börse and Johannesburg Stock Exchange to improve from its current 11th position.
The top four exchanges that issuers will consider beyond their home exchange in 2030 are the New York Stock Exchange (NYSE) (37%), Nasdaq (26%), London Stock Exchange (LSE) (24%), and Hong Kong Stock Exchange (24%).
Singapore is also expected to rank behind the Asian exchanges in India, Shanghai and Australia in 2030.
“We expect that SGX’s reputation as the most international exchange will remain intact given its pro-business approach. Together with the country’s stable political landscape, transparent regulatory environment and the relatively low volatility of the Singapore Dollar, it gives companies good reasons to consider listing on the SGX,” says Tham Tuck Seng, Capital Markets Leader at PwC Singapore.
According to the report, there is also expected to be a growing importance of the SGX and the Australian Securities Exchange (ASX) as the regional hubs for Southeast Asia.
Looking at the IPO pipeline, China (55%) is the country predicted to generate the most new issuers by 2030 followed by India (45%), the US (41%), and Brazil (21%).
Singapore (12%) comes in at seventh place, two spots behind the UK (18%), which is grappling with Brexit concerns.
“Increasing efforts by the regional exchanges to win over large technology companies or new economy companies will continue to intensify. We would, however, expect the recent market and regulatory developments can generate more IPO interest in SGX,” Tham says.
“Examples of such efforts by the SGX include the introduction of the dual-class shares framework, partnerships with Tel-Aviv Stock Exchange, NASDAQ, various investment relations and settlements of securities programmes,” he adds.
Nearly half of respondents say liquidity in the most important priority when choosing a listing location, while there is also an increase in the focus on valuations (32%) and concern about the costs of listing (29%).
Although 70% of respondents believe a public listing is becoming a less important source of funding globally, a similar proportion of survey respondents think it would be advantageous for successful companies to go public over some point in their life cycle. The most attractive private funding option, selected by 55% of respondents, is private equity.
Rather than simply being seen as rivals to public equity markets, PwC says companies cshould increasingly consider private markets to be complementary sources of capital that they can tap into when appropriate.
“Private equity has been significantly influencing capital markets in recent years, leading to fewer, larger, later IPOs - particularly with technology and ‘new economy’ companies,” says Ross Hunter, PwC Global IPO Centre leader. “For companies, the choice of credible exchanges for public listings, as well as the range of private funding options, will continue to expand, adding to the alternatives when they seek to raise capital.”
