SINGAPORE: Singapore Exchange Ltd., operator of Southeast Asia's biggest bourse, will introduce new listing rules next month that raise the bar for companies seeking to list shares on the mainboard as the city seeks to boost its reputation as a financial hub.
Companies seeking to list on the mainboard must have a minimum market capitalization of S$150 million (US$119 million) and have been profitable in the previous financial year, the bourse operator said in a statement. The exchange currently requires a minimum market capitalization of S$80 million for mainboard listings.
"The enhanced admission standards will increase Singapore's attractiveness for companies and investors, further strengthening its position as an international financial center," Chief Executive Officer Magnus Bocker said in a statement.
Regulators around the world have stepped up oversight of capital markets after coming under scrutiny during the global financial crisis in 2008. The Monetary Authority of Singapore set up a 13-member council in 2010 with a goal to boost corporate governance standards and investor confidence.
The bourse will allow mainboard listing of companies that have had only operating revenue in the previous financial year to list on the mainboard as long as their market capitalization is not less than S$300 million, according to the statement. Those with a minimum consolidated pre-tax profit of S$30 million and an operating track record of at least three years can also list on the mainboard.
Retail Investors
The new rules, which will also require initial public offerings to price at a minimum of 50 Singapore cents a share, will take effect on Aug. 10, Singapore Exchange said. The bourse also plans to increase public participation in IPOs by setting the minimum tranche that companies need to set aside for retail investors starting next year, it said.
"Retail investors will reap significant benefits in terms of having wider access to new IPOs," said David Gerald, president of the Securities Investment Association of Singapore. "At the same time, they can be better assured that companies listed on SGX are of good standing and quality. Investors can look forward to a more attractive market that has a higher level of corporate governance overall."
Between 8% and 10% of potential retail investors actively trade on the Singapore bourse, compared with between 16% and 18% in Australia and between 23% and 25% in Hong Kong, Bocker told reporters today. "We have a lot of opportunities to grow the retail market." (Bloomberg/T03/aph)
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