Singapore: The operator of the city’s securities and derivatives markets, Singapore Exchange Ltd, expects Indian companies to make up some of its biggest share sales this year following a tie-up with the Bombay Stock Exchange (BSE).
The exchange expects to draw Indian companies with more than S$1 billion (US $700 million) in market capitalization to sell shares, said Seck Wai Kwong, Singapore Exchange’s chief financial officer. Last year, only two of 73 companies that sold shares in Singapore had market values exceeding S$1 billion, according to Bloomberg data.
“We are seeing good interest,” Seck said. “Our strategy is to aim for the larger companies. India will be a significant source of listings.”
Singapore Exchange needs to attract larger foreign companies to sustain its standing as South-East Asia’s biggest bourse. It expects more than half of its publicly traded companies to come from overseas in 2012, from 36% now, Seck said. Singapore Exchange is collaborating with foreign bourses to increase overseas revenue. It bought 5% in BSE last year and sold 4.99% of itself to Tokyo Stock Exchange. Mercator Lines (Singapore) Ltd, a unit of Indian shipping firm Mercator Lines Ltd, and Ascendas India Trust, which invests in office and industrial properties, are among the India-related stocks that went public in Singapore last year.
Singapore “has got a great transparent regulatory environment, the overall processing time is faster than other regional exchanges,” said Thilan Wickramasinghe, an analyst with CLSA Asia Pacific in Singapore. “You will have competition from other regional exchanges, but you get better valuations. So, I don’t think that position can be that easily eroded.”
The exchange, which on Tuesday reported a 44% jump in second-quarter net profit, is seeking to diversify its sources of income as the trading volume of equities slow. Trading volume averaged at 1.8 billion a day since the start of the year, compared with 2.7 billion for 2007.
Chia-Peck Wong in Hong Kong contributed to this story.