Relaxed rules could spur cross-listing on SGX

There may be greater interest from Chinese companies.

A proposal to ease prospectus requirements for companies listed on 15 foreign exchanges could lift secondary listing applications in Singapore by 30% over the next two to three years, an expert said.

The Singapore Exchange (SGX) could draw five to 10 secondary listings each year if execution is effective, Henry Tan, group CEO and chief innovation officer at CLA Global TS Holdings Pte. Ltd., told Singapore Business Review.

“The actual growth depends on market conditions, investor appetite, and geopolitical stability,” he said in an emailed response.

Tan said secondary listings on SGX have been “modest and stagnant” in recent years, averaging only two to four yearly, well below the activity in Hong Kong or the US.

SGX had two secondary listings last year—PC Partner Group Ltd. and Helens International Holdings Ltd., according to PricewaterhouseCoopers International Ltd. It’s still zero as of end-May.

Cross-listing accounts for 10% to 15% of initial public offerings (IPO) on SGX by number, Tan said, citing 2023–2024 data. He expects streamlined prospectus rules to spur secondary listings from China.

He sees strong interest from technology and fintech, renewable energy and green tech, healthcare and biotech, as well as consumer goods and e-commerce.

SGX would love to attract “big names” like tech groups Sea Ltd. or Grab Holdings, Inc., both based in Singapore, said James Leong, CEO at Grasshopper Asia Co. Ltd. But every major exchange apart from stock exchanges in New York is facing the same problem, he pointed out.

“There is a lot of concentration in the US,” he said via Zoom. “You see names that are choosing to list on the New York Stock Exchange because they can push for higher valuation, and ultimately, the goal of any CEO or board is to get the best price for the listing.”

Under the proposal, the NYSE is among the 15 eligible bourses. So are the Australian Securities Exchange (ASX) Ltd., the London Stock Exchange, New Zealand Exchange Ltd., Bursa Malaysia Berhad, and the Hong Kong Exchanges and Clearing Ltd.

Leong said exchanges from smaller markets like Thailand, Indonesia, and Vietnam would have been a good addition to the list given their huge population, adding that these exchanges are “missed opportunities.”

Still, the plan to streamline listings, including secondary ones, could help create a more “interesting” trading ecosystem in Singapore, helping boost capital markets, he said.

“Singapore is clear, transparent, and a good market to come to, but there aren’t enough products right now,” he added.

He noted that while Singapore has a large capital base and strong asset management presence, much of the capital isn’t deployed on SGX due to its limited and low-volatility listings, which investors find less attractive.

Bringing in secondary listings from successful foreign companies could activate idle capital and diversify the local market, Leong said.

Tan said the relaxed rules could deepen the capital market and boost liquidity and competitiveness. The Straits Times Index (STI) gained 4.9% in the first quarter, whilst total return climbed to 5.3%.

“Introducing larger, well-known international companies would enhance the diversity and robustness of SGX’s offerings,” he said.

“More high-profile listings tend to attract institutional investors and active traders, which boosts trading volumes.”