Source Credit : Reuters
According to four sources, at least five companies from mainland China and Hong Kong are preparing for initial public offerings (IPOs), dual listings, or share placements in Singapore over the next 12 to 18 months. This strategic move reflects the growing interest of Chinese firms in expanding their presence in Southeast Asia, particularly in light of ongoing global trade tensions.
According to sources with direct knowledge of the situation, the companies involved include a Chinese energy firm, a healthcare group based in China, and a biotechnology organization located in Shanghai. These sources requested anonymity, as the plans have not yet been finalized and they are unable to disclose the names of the firms.
The proposed listings are poised to enhance the prospects of Singapore Exchange Ltd (SGX). Despite its reputation as a favored platform for yield-oriented investments, such as real estate investment trusts, SGX has faced challenges in attracting large-scale listings and increasing trading volumes.
According to its official website, the Singapore Exchange (SGX) facilitated only four initial public offerings (IPOs) in 2024. In stark contrast, its regional competitor, Hong Kong Exchanges and Clearing Ltd., recorded an impressive 71 new company listings during the same period. This significant disparity highlights the varying dynamics and competitive landscape of the IPO market in the Asia-Pacific region.
Chinese companies are increasingly seeking to access the Singaporean stock exchange as they aim to enter or expand their operations in Southeast Asia, particularly in light of the ongoing trade tensions with the United States. Jason Saw, Head of the Investment Banking Group at CGS International Securities, highlighted this trend.
U.S. President Donald Trump implemented tariffs of 145% on imports of Chinese goods, prompting China to respond with a 125% tariff on American products. However, both nations recently reached a consensus to initiate a 90-day pause in these escalating trade tensions. Despite this temporary reprieve, uncertainty lingers due to the impending deadline and the unpredictable nature of the Trump administration's trade policies.
Enquiries about listings on SGX “shot through the roof” after Trump ramped up his trade actions against China, Saw said.
“For the next years and decades, gateways from China to the world are going to be more important,” said Pol de Win, senior managing director and head of global sales and origination at SGX.
“Singapore is an important gateway, whether it’s trade (or) business activity from China to the outside world, and a listing in Singapore is an important component of that.” De Win did not mention the listing plans of the Chinese and Hong Kong firms.
