Information on IPO in Singapore
• PROFILE OF SINGAPORE EXCHANGE • LISTING REQUIREMENTS
A Pan-Asian Market
Number of Listings
84 18.3%
Mainboard SESDAQ
374 81.7%
As at end Sep 2000
Foreign Enterprises Share of Capitalisation
130.55 32.2% Singapore Foreign
274.67 67.8%
As at end Sep 2000
Sectoral Classification of Companies listed on SGX
Services Agriculture 8% 1% Multi-Industry Hotels/ 4% Restaurants 4% Properties 6% Construction 8% Manufacturing 38%
Finance 11%
Transport/Storage/Co mmunication 6%
Commerce Electricity/Gas/ 14% Water 0%
The manufacturing sector includes the electronics sector
A Pan-Asian Market
Number of 1999 IPOs
11 21.6%
Singapore Foreign
40 78.4%
For year ended Dec 1999
A Pan-Asian Market
1999 IPO Proceeds
Singapore Foreign
S$1,264.44 37.2%
S$2,136.17 62.8%
For year ended Dec 1999
Year 2000 Foreign Listings
• Philippines
– Ionics
• Hong Kong
– – – – – – – – Kingboard I-Comm Technology Kyosha Lafe Technology Giant Wireless North 22 FDS Jadason
• PRC
– Cytech Software
• Malaysia
– Nucleus – PK Tech
• New Zealand
- Brierley
• Australia
– Easycall
• United States
– Reed Group
Funds Raised By Companies listed in 2000
Funds Raised (S$)
200 - 600 mil 100 - 200 mil 20 - 100 mil 14 - 20 mil 10 - 14 mil 6 - 10 mil 2 - 6 mil
9 9 10 12 2 25 4
0
5
10
15 20 Number of companies
25
Market Capitalisation of Companies listed in 2000
Market Cap (S$)
10-30 bil 2-10 bil 100 mil-2 bil 20-100 mil 14 - 20 mil 0
4 3 9 14 41
10
20
30
40
50
Number of
100.0%
150.0%
50.0%
0.0%
Turnover Velocity
Dollar Turnover/Market Cap
Australia
Hong Kong
Singapore
Tokyo KLSE
Source: Federation Internationale Des Bourses De Valeurs
Jan-97 Feb-97 Mar-97 Apr-97 May-97 Jun-97 Jul-97 Aug-97 Sep-97 Oct-97 Nov-97 Dec-97 Jan-98 Feb-98 Mar-98 Apr-98 May-98 Jun-98 Jul-98 Aug-98 Sep-98 Oct-98 Nov-98 Dec-98 Jan-99 Feb-99 Mar-99 Apr-99 May-99 Jun-99 Jul-99 Aug-99 Sep-99 Oct-99 Nov-99 Dec-99 Jan-00 Feb-00 Mar-00 Apr-00 May-00
Ease & Efficiency of Trading
• Overseas investors can trade SGX listed shares through the Internet • Announcements by listed companies are available real time on the SGX website • A T+3 settlement period for trades done
MEASURES TO ATTRACT GLOBAL PARTICIPATION
• Establishment of an electronic link with Australian Stock Exchange to cross trade SGX and Australian listed stocks • Joint Venture with Amex to trade Amex listed exchange traded funds on SGX • MOU with NSE and IISL to trade futures contracts based on S&P CNX Nifty Index
MEASURES TO ATTRACT GLOBAL PARTICIPATION
• July 2000 : - Opened the membership for new clearing members to perform trading & clearing services - Allow dual membership of both securities & derivatives markets • October 2000: Brokerage rates are now freely negotiable
Flexible Rules…
Accounting Standards
• Singapore Statement of Accounting Standards • International Accounting Standards
• US GAAP
Domicile & Base of Operations
• Free choice of domicile of listed company
– Eg. Bermuda … [Non exhaustive]
• No need for operations in Singapore • Two independent directors, one resident in Singapore
Choice of Currency
• Free choice of trading currency.
Some of the more popular choices among foreign companies:
– S$ – US$ – HK$ .. (non-exhaustive)
• Choice of functional and/or reporting currency:
– S$ – US$ – Rupee .. (non-exhaustive)
Investor Confidence
• International standard of disclosure and corporate governance • Well regulated financial intermediaries • Sound financial system
Resilience Index
‘Asian economies’ vulnerability to a US slowing
1.2 1 0.8 0.6 0.4 0.2 0
ia Ta iw an Th ai la nd In do ne si a Ph ill ip hi ne K on g ng ap or e K or ea hi na M al ay s In di a
Source: SocGen Securities Research (May 2000)
H on g
Si
C
Ease of Access to Capital Market
Availability of Funds
• Strong presence of foreign & local fund managers (664 fund managers & 249 investment analysts) • Total funds managed (End of 1999) =S$246.2 billion • Venture Capital Funds (1999) Raised = $1.4 billion Managed = $10.2 billion
• PROFILE OF SINGAPORE EXCHANGE • LISTING REQUIREMENTS
SGX-Mainboard Listing Criteria
Alternative 1 Alternative 2 Alternative 3
Pre-tax profit S$7.5m over S$10 m in 1 3 years; or 2 years S$1 m per year Market Cap Nil Nil
Nil
S$80m
Shareholding 25% (10% to 25% if Market Cap spread >S$300m) held by 1000 shareholders
Primary listing: waiver from continuing listing obligations if also listed on a recognised international foreign exchange
Moratorium (Lock-up)
• Vendor share sales allowed at IPO
Promoters: - Controlling shareholders and their associates - Executive directors who own 5% or more upon listing
Why list overseas?
•Need global currency for overseas expansions or acquisitions
•Allows foreigners to invest in your shares
•Ability to grant employee share options to employees abroad •Attract funds from Non-Resident Indians •Raise profile of company abroad
Cost of Listing on SGX
• Initial Listings Fees: maximum of US$11,700
• Annual Listing Fees: maximum of US$1,170 • Generally Total Cost of Listing = 5% of proceeds raised
Stock Exchange Profile
Singapore Exchange offers… • • • • A Pan-Asian market Well regulated, stable and transparent Access to liquidity & capital Accessible market & flexible rules
• Low issuance cost
...In comparison, proportion of foreign companies listed on HKSE
Foreign 2%
D omestic Fore ign
Domestic 98%
As at end Aug 2000
Rule Advantages..
• • • • Comprehensive listing criteria Flexible rules Equal treatment with local companies Choice of listing currency
Flexible Listings Options
SGX Then NASDAQ/ NASDAQ Then SGX
• List on SGX to raise capital to build out business model in Asia • Enable foreign investors to invest in your shares round the clock • Access investors both in US and Asia in two steps to enhance fund raising
Simultaneous SGX & NASDAQ
• Business model sufficiently developed for US market • Obtain US valuation, access liquidity both in US and Asia • Avoid becoming orphan stock on NASDAQ • Lower listing cost- one prospectus for both => Access investors simultaneously in US and Asia to enhance liquidity, valuation and minimise listing cost
Share Price Performance on NASDAQ vs SGX
35
Creative NASDAQ price ST Ass Nasdaq price ST Ass SGX price CSM NASDAQ price CSM SGX price
30
Creative SGX price
Share Price (US$)
25
20
15
10
5
0
Aug 1999 June 2000 May 2000 Aug 2000 Nov 1999 Sep 1999 Feb 2000 Apr 2000 Oct 1999 Dec 1999 Jan 2000 Mar 2000 Jul 2000
CSM Volume Traded on NASDAQ vs SGX
(adjusted for the difference in number of shares offered in the 2 markets)
50 CSM NASDAQ vol 40
Volume Traded Millions
CSM SGX vol
30
20
10
0
Dec 99 Jan 00 Feb 00 Jun 00 Jul 00 Nov 99 Aug 00 May 00 Mar 00 Apr 00
Total invitation: 250 mil shares US & International offering : 225 mil shares Singapore offering : 25 mil shares (10% of total
ST Assembly Volume Traded on NASDAQ vs SGX
(adjusted for the difference in number of shares offered in the 2 markets)
80 70 60
Volume Traded
ST Ass NASDAQ vol ST Ass SGX vol
50
Millions
40 30 20 10 0 Jan 00 Feb 00 Mar 00 Apr 00 May 00 Jun 00 Jul 00 Aug 00
Total invitation size : 170 mil shares US & international offering : 153 mil shares Singapore offering : 17 mil shares (10% of total invitation)
Thank You
SGX website: www.sgx.com