Chinese companies head to Singapore Exchange
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Singapore Exchange Ltd, the Asia-Pacific region's integrated securities and derivatives exchange, announced 11 Chinese companies had listed in Singapore by the end of October, about 33 percent of the total newly-listed companies on the exchange this year.
The companies are mainly in the real estate and manufacturing industries. Among them, Global Logistic Properties on Oct 18 raised $6.69 billion in its IPO, the highest in Singapore since 1993, while Double Estate Co raised $367.87 million in April.
"China is a significant target for future mergers, and the Singapore Exchange focuses on development in the Asian market," said the executive vice-president of the exchange, Lawrence Wong, on Thursday.
The listed Chinese companies performed well in the last three months, Wong said. According to data from UBS, from August to October, the index performance of S shares (Chinese companies' shares issued by the Singapore Exchange) was 18 percent, 7 percentage points higher than the 11 percent seen by the Straits Times Index which tracks 30 representative companies listed on the Singapore Exchange.
One of the advantages for Chinese companies is that the successful launch of 19 American Depositary Receipts (ADRs) by the exchange will provide investors with an array of innovative products and trading opportunities, Wong said. Another advantage is that the Singapore Exchange has launched a collaboration with Nasdaq OMX Group, which offers a cross-listing opportunity to currently listed Chinese companies on both of the exchanges in addition to dual-listing business for new IPOs, said the vice-president.
Additionally, a recently proposed deal with the Australian Securities Exchange is expected to enable global customers to capitalize on the expanded platforms of listing, trading, clearing and settlement. "If the deal is approved in the future, it will allow the Singapore Exchange to provide better services to our existing and potential customers," Wong said.
At end of October, the predicted market value of the combined group was about $12.3 billion. There are now 157 Chinese companies listed in Singapore, among which 27 are from Fujian province, 26 from Guangdong province and 20 from Jiangsu province. "In the next step, the Singapore Exchange will expand business with companies in central and west China," Wong said.
The exchange signed a Listing Memorandums of Understanding with the State-owned Assets Supervision and Administration Commission of the State Council and Financial Affairs Office of the Jiangsu provincial government in May, in order to persuade Chinese companies to list in Singapore. Earlier, it signed Memorandums of Understanding with Fujian, Liaoning, Shandong and Zhejiang provinces, as well as the Agricultural Bank of China.
In 2010, the Singapore Exchange raised $98.1 billion in total. The IPOs have reached $3.5 billion, increasing by 45.83 percent year-on-year. Meanwhile, the market value of Chinese companies listed in the exchange was $43 billion, by the end of October.
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