Companies are preparing to list on the Singapore Exchange S68 (SGX) amid an improving macroenvironment, potentially ending a “low base” for equity listings in recent years, says SGX Group CEO Loh Boon Chye.
Speaking on Aug 8 at the bourse’s results briefing for FY2024 ended June 30, Loh says potential Mainboard listees are making preparations, a marked change from a series of Catalist listings in FY2024. “We hope the market stays more favourable [and] more conducive, but you’ve seen some of the US numbers in the last week. So, all things have to be aligned.”
SGX recorded seven new equity listings in FY2024, which raised $117.0 million, down from eight new listings that raised $37.6 million in FY2023. Secondary equity funds raised were $1.2 billion in FY2024, down from $4.8 billion in FY2023.
SGX’s equities market was in focus last week when the Monetary Authority of Singapore (MAS) announced on Aug 2 a new review group to “make listings in Singapore a more attractive option for companies”, as Minister for Transport and Second Minister for Finance Chee Hong Tat said.
Chee, who is also an MAS board member, will chair the group, which consists of leaders from Temasek Holdings, the Ministry of Finance, the Singapore Economic Development Board and Tikehau Capital, among others. The 10-member group aims to release its recommendations within a year.
Strictly speaking, the only committee member from the private sector is Neil Parekh, partner and head of Asia, Australia and New Zealand at Tikehau Capital. SGX’s sole representative in the group is its chairman Koh Boon Hwee.
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Some have questioned the composition of the group, and whether market participants like brokers and remisiers could have more relevant perspectives.
Loh says the exchange is in “constant conversation” with brokers and securities houses, and the group will also conduct “wider engagement”. “We will obviously represent what we hear [and] what has been suggested to us by the broader ecosystem.”
Loh also mentioned recent efforts to improve stock market liquidity. “There has obviously been efforts to grow the deeper research ecosystem, and also our own efforts on retail outreach.”
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He expects the group to focus on both the supply and demand side of the equities market. “What is important is for the overall ecosystem to come together.”
‘One-time provision’
SGX also reported a “one-time provision to fund initiatives targeted at improving vibrancy of the securities market” of some $8 million. Together with other adjustments like amortisation of purchased intangibles and acquisition-related expenses, SGX posted adjusted FY2024 expenses of $604.0 million, up 2.5% y-o-y.
In response to questions from The Edge Singapore, CFO Ng Yao Loong says this $8 million adds to about $2 million in similar provisions in the past. “SGX is already incurring a certain level of expenses and investments to support our asset classes, including the securities market.”
According to Ng, this is in line with Loh’s focus on the broader ecosystem. “We need the ecosystem — the brokers, the financial advisers and so on — to talk to the clients [and] customers. This is our attempt to say: ‘Let us work with you to expand the product shelf that we have, the distribution, connectivity and so on.’”
SGX’s total expenses rose 7.7% y-o-y to $604.9 million in FY2023, but this rose at a slower rate in FY2024, up 3.4% y-o-y to $625.3 million. After raising quarterly dividend per share (DPS) to 9 cents from 8.5 cents previously, Ng says SGX channelled “additional savings” into these initiatives.
SGX also announced in December 2023 that Ng will move to a new role as co-head of equities in mid-2024. However, Loh now says Ng will only join the equities team — with Janice Kan as co-head — once SGX has found a replacement.
Shares in SGX were trading 5 cents higher, or 0.51% up, at $9.84 prior to the midday break.
