A minimum of five companies from mainland China and Hong Kong are looking to conduct IPOs, dual listings, or share offerings in Singapore within the next 12 to 18 months. This move comes as these firms seek new opportunities in Southeast Asia amidst ongoing global trade tensions, as reported by several sources.
The firms involved are primarily in the energy sector, healthcare, and biotechnology, particularly those based in Shanghai. While the sources spoke on condition of anonymity due to the tentative nature of these plans, their insights highlight a growing trend.
This potential uptick could benefit the Singapore Exchange Ltd., which has positioned itself as an attractive option for yield-seeking instruments like Real Estate Investment Trusts, though it has faced challenges in attracting large listings and boosting trading activity.
In 2024, SGX recorded four initial public offerings, a stark contrast to the 71 new listings seen by its competitor, the Hong Kong Exchange and Clearing Limited.
Amid these changing dynamics, Chinese firms are eyeing Singapore’s market, as they aim to broaden their reach in Southeast Asia during a time of heightened trade conflict with the United States. The head of an investment banking group noted that these movements reflect broader ambitions amid this tension.
Following President Trump’s imposition of a 145% tariff on Chinese imports, China retaliated by raising tariffs on U.S. goods, which created further unpredictability. There’s ongoing uncertainty surrounding trade policy, making considerations for listing in Singapore all the more complex.
CGS International, which is state-owned, has already begun its listing process on SGX this year, collaborating with other companies from China, although the exact names were not disclosed.
Singapore stands as a crucial gateway for business interactions between China and global markets, and several sources noted that inquiries regarding listings there have surged following amplified trade measures from the U.S.
Looking ahead, it’s anticipated that about $100 million could be raised by some companies from mainland China and Hong Kong via Singapore’s main listing options.
Despite this, SGX isn’t typically the preferred venue for Chinese firms aiming to enter international markets. Many still prefer Hong Kong, where there’s stronger backing from Beijing and a greater pool of investors familiar with Chinese enterprises.
However, as tensions with Washington increase, there is a noticeable shift encouraging these companies to establish a stronger presence in Southeast Asia. Plans for listing in Singapore are expected to be announced later, which may include a tax rebate for primary listings as part of broader measures intended to fortify the local stock market.
Emphasizing the significance of Singapore in the future, one expert noted that political stability and its neutral stance could be appealing factors for businesses. Yet there are still challenges ahead, including the conservatism of local investors and stricter listing criteria, which may hinder Singapore’s ability to compete with Hong Kong in attracting equity listings anytime soon.
Some industry voices argue that technology firms, in particular, require easier access to the listing process. As most startups in the area are based in Singapore, it seems like a natural fit for those companies to list there.
