**Singapore’s Stock Exchange Faces Lowest Number of Listings in Two Decades**
The number of companies listed on the Singapore Exchange (SGX) has reached its lowest level in two decades, with just four listings this year and several delistings. This decline has led regulators to investigate ways to stem the slide and attract more companies to list. Raymond Lim, head of investment banking at DBS, Southeast Asia’s largest bank, stated that it is a combination of factors contributing to this trend.
One of the significant challenges Singapore faces is the competition from the United States, where top companies are opting to list in New York. Shein, a Chinese fast-fashion company, is considering listing in London, with a potential market valuation of £50 billion. This would make it one of the largest listed companies in the UK. Singapore’s well-known companies, such as super app Grab and e-commerce group Sea, have also chosen to list in New York in recent years.
Despite the influx of private capital into the city-state and the growth of its bond trading, derivatives, and real estate investment trusts markets, SGX has struggled to repeat that growth through initial public offerings (IPOs). The Monetary Authority of Singapore (MAS), which launched a review of the country’s stock market, has discussed ideas to attract more fund managers to invest in the stock market to address demand issues, while relaxing some disclosure rules and investor safeguards to encourage more companies to list.
“It’s a chicken-and-egg situation,” said an observer. “We have to get great companies listed and see more fund managers in the market who will only be attracted by the prospect of investing in great companies.”
Several investment bankers told the Financial Times that 2024 could be the lowest point for listings in Singapore due to political uncertainty surrounding global elections. They expressed confidence in a healthy pipeline for IPOs next year.
The cost of listing on SGX has decreased, with four companies listing on the Singapore stock market. However, the largest listed company in Singapore, the Singapore Institute of Advanced Medical Sciences Healthcare Group, has lost 71% of its market value since its initial public offering in March. Stock markets worldwide, particularly London, have also struggled to attract listings due to fierce competition and high valuations in the United States.
Malaysia has had 46 IPOs this year, compared to only three listed companies in the Philippines, with a total value of US$197 million. While Singapore has benefited from being a global hub for internationally listed companies, it now needs to attract more companies.
**FAQs:**
**1. What is the Singapore Exchange?**
The Singapore Exchange (SGX) is a stock exchange located in Singapore, providing a platform for companies to raise capital through initial public offerings (IPOs) and for investors to buy and sell securities.
**2. How many companies are listed on the Singapore Exchange?**
There are 617 companies listed on the Singapore Exchange (SGX) as of October, the lowest level in two decades.
**3. What are the reasons for the decline in listings on the Singapore Exchange?**
The decline in listings can be attributed to a combination of factors, including competition from the US stock market, global economic uncertainty, and regulatory hurdles.
**4. Are there any relief measures in place to attract companies to list on the Singapore Exchange?**
Regulators are reviewing the stock market and considering measures to attract more fund managers and companies to list. Some ideas include relaxing disclosure rules and investor safeguards.
**5. How many IPOs were there in Southeast Asia this year?**
According to Dealogic, the amount of capital raised through IPOs across Southeast Asia this year is the lowest in at least 10 years.
**Conclusion:**
The decline in listed companies on the Singapore Exchange highlights the challenges this Asian financial hub faces in attracting top companies to list. With its well-developed infrastructure and strong liquidity, Singapore needs to make adjustments to its regulatory environment to encourage more IPOs. By making the process of listing more attractive to companies, SGX can ensure the continued growth of its market and provide a platform for companies to raise capital.
