The Singapore Exchange (SGX) can be a “very viable pillar” for companies seeking a dual listing in an Asian timezone, says SGX CEO Loh Boon Chye.
A secondary listing on SGX will give these companies “24-hour liquidity across a global investor pool”, he adds.
Speaking at a media briefing ahead of SGX’s 1HFY2022 results on Feb 4, Loh’s comments come amid reports that leading electric vehicle (EV) maker Nio is exploring a secondary listing on SGX. The China-based company has been listed on the New York Stock Exchange since 2018.
According to the International Financing Review, Hong Kong is the favoured listing for these “home-coming” companies but SGX is positioned as a “neutral” location with good access for the international investment community as well.
Says Loh: “With the initiatives that we've done in the last two years, whether that is investor outreach, regional retail market makers, interagency initiatives and our Spac frameworks, we're really now seeing a few pockets of clear interests.”
“Dual listing is really one of a very viable capital raising options for companies and SGX does provide a conducive platform with a wide and complementary pool of investors for some of these companies,” he adds.
See also: 'China's Tesla' Nio mulling SGX secondary listing
Beyond a dual listing, initiatives like Anchor Fund @ 65 and the EDBI Growth IPO Fund encourage companies to gun for a “pure IPO”, says Loh.
Last September, the Singapore government co-invested $1.5 billion with Temasek Holdings, establishing the Anchor Fund @ 65. The fund will support high-growth enterprises eyeing an IPO, including secondary and dual listings on the SGX.
EDBI — the venture arm of the Economic Development Board — also introduced the Growth IPO Fund. With $500 million for a start, it will invest in growth-stage companies to give them a leg up to an IPO here.
See also: SGX 1H22 net profit inches down 3% to $222 mil
There were six new equity listings on SGX in the 1HFY2022 period, which together raised $1.3 billion. Among them was Digital Core REIT, which raised US$600 million.
Finally, while the Spac framework is in its early days, Loh is optimistic that the new option will spur interest in equity raising on SGX. “We will work through the framework to have a good group of sponsors coming through, but I think the key today is the subsequent business combinations.”
SGX welcomed three Spacs in January. Vertex Tech debuted on Jan 20, raising $200 million. Pegasus Asia followed on Jan 21, raising $170 million, while Novo Tellus Alpha listed on Jan 27 with $150 million raised.
But while all three Spacs debuted at $5 per share, trading volume has been muted and share prices have slid to between $4.85 and $4.99, despite stabilising action by issue managers.
That said, Spacs are “not expected to trade a lot”, says Loh. “Relative to the overall global market, I think the performance of the three Spacs has held up well.”
“Listing the Spac is only the initial step. The sponsors are clearly looking at potential acquisitions in a business combination. With the number of start-ups, businesses and unicorns, we are confident that this will actually create capital raising opportunities for these companies and create more choices for investors,” he says.
“It is now upon us to try and harness the interests of these prospects and work with them to an eventual listing. Obviously, we hope market conditions will continue to stay conducive,” adds Loh.
Shares in SGX closed 2 cents lower, or 0.21% down, at $9.40 on Feb 4.
Photo: SGX
