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Singapore’s stock exchange is poised for a revival with tens of companies in talks to list, according to its chief executive, signalling the exchange may be recovering after decades of companies withdrawing listings.
SGX reported its strongest annual revenues and net profits in 25 years on Friday, as the bourse pushes to expand its commodity business through acquisitions.
Chief executive Loh Boon Chye said this was partly due to increased trading on the back of disruption in global markets caused by uncertainty surrounding US tariffs.
“The US still [has] the largest capital markets, but because global investors are thinking about . . . greater diversification, it has created shifting capital flows,” said Loh in an interview with the Financial Times.
He added that SGX was benefiting from investors moving their money to Asia. The exchange reported S$1.3bn ($1bn) of net revenue over the past year, up 12 per cent on the previous year, and S$648mn of net profit, up 8 per cent.
Singapore’s Straits Times Index, which tracks the performance of the top 30 companies listed on SGX, has risen 37 per cent over the past 12 months.
Companies have been withdrawing listings from Singapore for years, as large south-east businesses favoured bigger US markets. The number of companies listed in Singapore fell to 608 in June, its lowest level for more than two decades.
But Loh said there were more than 30 companies in discussions with their advisers about listing on SGX, with more than 10 already in talks with the exchange’s regulatory arm about applying for an IPO.
Since Loh became chief executive a decade ago, he has tried to diversify the business away from depending on its stock market revenue. One of his first moves was buying the UK’s Baltic Exchange, which traces its origins back to London’s 18th-century coffee houses.
The Baltic is best known for compiling The Baltic Dry index, which charts the cost of transporting commodities such as iron ore and grain in bulk.
SGX’s results reflected its range of business areas, which include fixed income, currencies and commodities, which made up 26 per cent of group revenue.
Loh said the group was focused on growing its commodities business — which is centred around iron ore, rubber, petrochemical and freight trading — and was weighing up further deals.
“We also want to grow our business inorganically with targeted acquisitions,” he said.
“[Commodities] is clearly a space that we’re seeing shifting investment flows and how investors are looking at asset allocation.”
Singapore’s fortunes have diverged from some other exchanges in the region, which have recorded high growth. Hong Kong’s stock exchange recently said it had 208 companies in its IPO pipeline, an all-time high.
While Hong Kong has benefited from Chinese companies choosing the venue over the US as a result of rising tension between Beijing and Washington, companies considering Singapore were usually more global with business interests in south-east Asia, SGX officials said.
The dearth of listings has prompted the Monetary Authority of Singapore, the local financial regulator, to set up a group to look at ways to entice more companies and global investors to the city-state.
SGX noted an early success of this initiative with the listing of a data centre real estate investment trust, NTT SC Reit, last month, which was Singapore’s largest IPO since 2017.
