Singapore's SGX sees IPO business plunging on tough regional competition

The SGX had the smallest haul of new share sales among the region's four largest stock markets in 2015.

Last year, the Singapore Stock Exchange (SGX) was far outsmarted by its regional peers who have been aggressively luring foreign as well as local firms.

The SGX had the smallest haul of new share sales among the region's four largest stock markets in 2015.

Total listing on SGX, South-east Asia's biggest bourse, collected US$34mn and that was the lowest among the four major peers in the region.

A Bloomberg report says Singapore's primacy in initial public offerings in South-east Asia has come to an end. Singapore-listed firms raised US$366mn, its lowest in 14 years.

The amount was less than 10% of funds raised from Thailand's IPOs, just a third of Malaysia's and half of Indonesia's, the report said.

"The smaller South-east Asian exchanges have been promoting themselves as a listing venue," said Mr Pankaj Goel, co-head of South-east Asia investment banking at Credit Suisse Group. "It makes sense for Indonesian companies to list in Jakarta and for Thai companies to list on Thailand's stock exchange."

It is not because the quality of SGX services going down but the growing competitiveness of its regional peers leading to the scenario according to experts.

Indonesia, which has South-east Asia's biggest population and largest economy, plans to start an exchange dedicated to young technology companies, while Thailand's premier has highlighted the importance of the country's capital markets.

Jakarta's plan is to become the region's biggest stock exchange within five years.

The Philippine Stock Exchange has been successful in making multinational companies with operations in the country to list on the Manila exchange. Listing of the South Korean firm Phoenix Semiconductor in 2014 is an example.

Bursa Malaysia in July tweaked its listing rules to boost its attractiveness and cut compliance costs. Several Malaysian companies including palm oil producer Felda Global Ventures Holdings Bhd, billionaire T Ananda Krishnan's Astro Malaysia Holdings Bhd and IHH Healthcare Bhd, Asia's biggest hospital operator, have already listed in Kuala Lumpur.