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To Boost Appeal As A Listing Destination, Singapore Exchange Goes After Tech Start-Ups

To Boost Appeal As A Listing Destination, Singapore Exchange Goes After Tech Start-Ups
As it seeks to alter perception that the city state is an attractive listing destination only for real estate investment trusts (REITs), Singapore’s sole stock exchange is gunning for more initial public offerings from technology firms.
And in order to help young tech companies in Singapore prepare to list on the exchange, the stock exchange has tied up with the city state's technology and media regulator.
To offer advisory and financial support to companies looking to list on the exchange, there will be joint working with lawyers, audit firms and IPO sponsors between the partnership between the Singapore Exchange (SGX) and Infocomm Media Development Authority.
SGX and IMDA said in a statement that the barriers for tech companies to access the Singapore capital markets would be lowered to a great extent by doing so.
"The actual (listing) cost is one aspect of it, any efficiency on that ground is a good thing… but the key (advantage) is time-to-market," said Chew Sutat, SGX's equities and fixed income head. He added that getting start-ups prepared earlier to go public can speed up the listing process. A listing on the exchange's Catalist board, for example, can be completed in as quickly as two months, he said.
Amid concerns of its waning appeal as a listing destination, SGX has in recent years stepped up efforts to lure a greater number of IPOs. Several Singapore companies have opted to list overseas such as in Hong Kong, Australia or the United States and departures outnumbered new listings on the exchange last year.
And in an environment where there are attempts to lead start-ups to eventually list on their stock exchanges, there are several exchanges in Asia, such as those in South Korea and Thailand, who are in the process of setting up trading platforms for start-ups which has led to a heated competition among such exchanges for start-up IPOs.
A slice of growing tech start-up pie in the region is also desired to be obtained by the SGX.
"We think a lot of the news out there about Singapore not being a growth market, Singapore not being an exciting market for growth stories for technology is probably overblown," said Chew.
With a market capitalization of 80 billion Singapore dollars ($57.8 billion), there are about 80 tech companies listed on the SGX today, he said. And compared to the better known REITs and business trusts, whose market capitalization is about 75 billion Singapore dollars ($54.2 billion), this is a larger figure.

Christopher J. Mitchell

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