Singapore exchange looks to India - Asia Australia Investment Conference - Brief Article

Business Asia, May, 2002

Officials from Singapore Exchange Ltd are on a mission to the city that houses Asia's oldest bourse, wooing companies listed on the Mumbai Stock Exchange.

Faced with a slump in trading and rising delistings at home, Singapore Exchange needs to find new sources of revenue. Of the 98 non-Singaporean companies from about 10 countries listed on Singapore's main and secondary boards, none are from India.

"The market here is so small and the number of listings is shrinking, so they're trying all the untapped markets near Singapore," said David Lum, a regional banking analyst with Daiwa Institute of Research in Singapore.

Singapore's exposure to Indian companies is not new. Government of Singapore Investment was one of the earliest investors in Infosys Technologies Ltd, when India's second-biggest software developer by market value sold shares to the public in 1993.

Now, it wants companies like Infosys and Wipro Ltd, India's biggest publicly traded software developer, to also consider listing in the city-state. That's why chief executive Thomas Kloet of Singapore's securities and derivatives exchange will also visit Bangalore, the country's information-technology center and home to infosys.

Kloet's mission has added urgency because the market capitalisation of stocks on Singapore's two boards has fallen from S$456 billion ($467 billion) at the end of 1999 to S$335 billion at the end of last year, according to figures from the Singapore exchange's website.

Shrinking bourse

"Delistings are outpacing the pace of IPOs, and that has put intense pressure on the management of the exchange," said Christopher Gee, an analyst with ING Barings Singapore.

About 15 companies stopped trading on the exchange in the first quarter of the year, versus 10 that went public. New listings on both Singapore boards last year fell to 37 from 83 in 2000, according to exchange figures.

Still, getting Indian companies to list in Singapore "won't be easy," said Lum. Besides, it may be hard to convince Indian companies to hold their public offerings in Singapore because several Indian businesses have successfully sold shares on US exchanges.

No incentives

"What does Singapore really offer? Are there any incentives?," asked ING's Gee, who has a "sell" rating on shares of the exchange.

The exchange doesn't plan to offer special incentives for Indian companies or to target specific companies, a spokesman said.

Kloet and other exchange members have traveled to India several times before to encourage Indian companies to list without success, he said. Investors say the smaller size of the Singapore market and political turmoil in India may make the island attractive.

Bloomberg