Source of article: The Business Times
Writer credits: Megan Cheah
In summary:
The wave of de-listings from the Singapore market since 2016 have involved a number of small and mid-cap companies. The perception that the Singapore market lacks liquidity and has poor valuations are the primary reasons why Singapore-listed companies are privatising. If not properly addressed, this could in turn perpetuate the perception that the Singapore market is not an attractive place to raise capital.
The growth of family offices, a burgeoning pool of venture funds and private equity have provide companies with alternative options to raise funds. Promising unicorns in the AI space and renewable energy industry have attracted considerable attention and funding from private equity in the last 5 years. The attractiveness of private equity funding vis-a-vis the substantial costs of seeking and maintaining a public listing status could lead to more companies eschewing the stock market. This is not just happening in Singapore, but in all other major capital markets.
To be a dynamic capital market, companies must be permitted to list and exit from the SGX without difficult barriers, so long as the issuers abide by the listing and de-listing rules.
Instead of focusing on the trend of de-listings, Singapore Inc. should do more to improve market liquidity and valuations. Singapore sovereign funds, Temasek Holdings and GIC, that are significant investors in a number of promising and profitable ventures and unicorns, should and would be in the position to influence such companies to list on the Singapore market. This will boost institutional interests in the local bourse. The market regulators should also do more to fund and promote research capability and to up-lift the competency and know-how of our local research houses. There may be a need to attract more foreign talent to complement our local talent pool in the market research industry.
I shared my views with Megan Cheah in the attached front page story of the Singapore Business Times, published on 9 August 2023.
My post on LinkedIn is here.