Singapore offshore-listed companies consider ‘homecoming’ flotations

Some of Singapore’s largest offshore-listed companies have considered whether to hold “homecoming” share sales in the city-state after approaches from its stock market and investment bankers.

The talks, which followed a recent wave of homecoming listings by Chinese technology companies in Hong Kong, would provide a boost for the south-east Asian nation’s bourse, the Singapore Exchange.

Singaporean companies that have discussed the move include Sea, an internet company that listed in New York in 2017, ride-hailing and food delivery app Grab and Hong Kong-listed gaming group Razer, according to several people familiar with the talks. Grab is separately listing via a special purpose acquisition company, or Spac, in the US.

The homecoming listings in Hong Kong were driven by political pressure from the US, but they have allowed the groups to raise large amounts from investors closer to their China headquarters.

SGX’s equity trading business, meanwhile, has been hurt by a series of accounting scandals that have led to delistings as well as low trading volumes.

It has struggled to attract tech names despite partnerships with the Nasdaq and Tel Aviv exchanges and has looked for other routes to grow, including a proposal to become the first bourse in Asia to allow Spac listings.

A US investment banker in Singapore said: “Historically the idea you could do meaningful local listings was only possible for a very select group, but that has changed dramatically in the last couple of years. The homecoming exercise in Hong Kong has created a huge amount of extra liquidity for those companies.”

SGX told the Financial Times it had seen “increasing interest in our secondary listing framework as companies see the value of being listed closer to home”.

However, one senior investment banker said the SGX’s small size meant secondary listings there “make little sense from a capital markets perspective but there may be political pressure”.

The market capitalisation of Singapore’s equity market totalled about $690bn at the end of April — equivalent to about one-tenth of Hong Kong’s $6.9tn market, according to FT calculations based on figures provided by the exchanges.

Sea, whose market value of $145bn makes it larger than most US tech stocks, has been approached by SGX and bankers about a possible dual listing, according to a person familiar with the matter.

The company has talked to its bankers at Goldman Sachs about whether to explore such a deal, according to a second person. Sea and Goldman declined to comment. 

SGX has approached a string of other high-profile foreign-listed companies, according to a senior investment banker in Singapore familiar with the matter.

Grab, south-east Asia’s answer to Uber, has looked into whether to carry out a secondary listing in Singapore after it completes its $40bn Spac deal to list on Nasdaq, according to two people close to the matter.

The ride-hailing giant, whose backers include Singapore state investment fund Temasek, said: “We’ve explored opportunities in south-east Asia, but do not have plans for a secondary listing now.”

Hong Kong-listed Razer, which sells video game electronics, is in talks with banks about listing on a second exchange, according to two people familiar with the matter.

South-east Asia has benefited as international investors diversify away from China amid geopolitical tensions with the US, and following growth in its tech and consumer sectors. 

David Biller, head of investment banking for south-east Asia at Citi, said countries such as Indonesia, Malaysia and Thailand were “now at the forefront of investable growth in the region away from China and India”.

Martin Siah, head of south-east Asia global corporate and investment banking at Bank of America, said it had been a “breakout year” for investment banking activity in south-east Asia, particularly in Thailand and the Philippines.

This year, investment bank fees from deals in countries in the Association of Southeast Asian Nations, whose largest markets are Singapore, Indonesia, Thailand, Malaysia and the Philippines, are at a near-record level of $175m, according to data from Dealogic.

Additional reporting by Hudson Lockett in Hong Kong

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