Transcript The Stock Exchange of Singapore

Information on IPO in
Singapore
• PROFILE OF SINGAPORE EXCHANGE
• LISTING REQUIREMENTS
A Pan-Asian Market
Number of Listings
84
1 8 .3 %
Mainboard
SESDAQ
374
8 1 .7 %
As at end Sep 2000
Foreign Enterprises
Share of Capitalisation
130.55
32.2%
S ingapore
For eign
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$2,136.17
62.8%
For year ended Dec 1999
Year 2000 Foreign Listings
• Philippines
– Ionics
• PRC
– Cytech Software
• Malaysia
– Nucleus
– PK Tech
• New Zealand
- Brierley
• Australia
– Easycall
• Hong Kong
–
–
–
–
–
–
–
–
Kingboard
I-Comm Technology
Kyosha
Lafe Technology
Giant Wireless
North 22
FDS
Jadason
• United States
–
Reed Group
Funds Raised By Companies listed in 2000
Funds Raised (S$)
4
200 - 600 mil
2
100 - 200 mil
25
20 - 100 mil
9
14 - 20 mil
10
10 - 14 mil
12
6 - 10 mil
9
2 - 6 mil
0
5
10
15
20
Number of companies
25
Market Capitalisation of Companies listed in 2000
Market Cap (S$)
3
10-30 bil
9
2-10 bil
14
100 mil-2 bil
41
20-100 mil
4
14 - 20 mil
0
10
20
30
40
Number of companies
50
150.0%
100.0%
0.0%
Jan-97
Feb-97
Mar-97
Apr-97
May-97
Jun-97
Jul-97
Aug-97
Sep-97
Oct-97
Nov-97
Dec-97
Jan-98
Feb-98
Mar-98
Apr-98
May-98
Jun-98
Jul-98
Aug-98
Sep-98
Oct-98
Nov-98
Dec-98
Jan-99
Feb-99
Mar-99
Apr-99
May-99
Jun-99
Jul-99
Aug-99
Sep-99
Oct-99
Nov-99
Dec-99
Jan-00
Feb-00
Mar-00
Apr-00
May-00
Turnover Velocity
Dollar Turnover/Market Cap
Australia
Hong Kong
Singapore
Toky o
KLSE
50.0%
Source: Federation Internationale Des Bourses De Valeurs
Ease & Efficiency of Trading
• Overseas investors can trade SGX listed
shares through the Internet
• Announcements by listed companies are
available real time on the SGX website
• A T+3 settlement period for trades done
MEASURES TO ATTRACT
GLOBAL PARTICIPATION
• Establishment of an electronic link with Australian
Stock Exchange to cross trade SGX and Australian
listed stocks
• Joint Venture with Amex to trade Amex listed
exchange traded funds on SGX
• MOU with NSE and IISL to trade futures
contracts based on S&P CNX Nifty Index
MEASURES TO ATTRACT
GLOBAL PARTICIPATION
• July 2000 :
- Opened the membership for new clearing
members to perform trading & clearing services
- Allow dual membership of both securities &
derivatives markets
• October 2000: Brokerage rates are now freely
negotiable
Flexible Rules…
Accounting Standards
• Singapore Statement of Accounting Standards
• International Accounting Standards
• US GAAP
Domicile & Base of Operations
• Free choice of domicile of listed company
– Eg. Bermuda …
[Non exhaustive]
• No need for operations in Singapore
• Two independent directors, one resident in
Singapore
Choice of Currency
• Free choice of trading currency.
Some of the more popular choices among foreign companies:
– S$
– 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
Th
ai
la
nd
In
do
ne
si
a
Ph
ill
ip
hi
ne
In
di
a
Ta
iw
an
hi
na
C
ia
M
al
ay
s
K
on
g
K
or
ea
H
on
g
Si
ng
ap
or
e
1.2
1
0.8
0.6
0.4
0.2
0
Source: SocGen Securities Research (May 2000)
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
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
Alternative 3
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$1,170
• Generally Total Cost of Listing = 5% of proceeds
raised
Stock Exchange Profile
Singapore Exchange offers…
•
•
•
•
A Pan-Asian market
Well regulated, stable and transparent
Access to liquidity & capital
Accessible market & flexible rules
• Low issuance cost
...In comparison, proportion of foreign
companies listed on HKSE
Foreign
2%
D o m e s t ic
F o re ig n
Domestic
98%
As at end Aug 2000
Rule Advantages..
•
•
•
•
Comprehensive listing criteria
Flexible rules
Equal treatment with local companies
Choice of listing currency
Flexible Listings Options
SGX Then NASDAQ/
NASDAQ Then SGX
• List on SGX to raise capital to build out
business model in Asia
• Enable foreign investors to invest in your
shares round the clock
• Access investors both in US and Asia in
two steps to enhance fund raising
Simultaneous SGX & NASDAQ
• Business model sufficiently developed for
US market
• Obtain US valuation, access liquidity both in
US and Asia
• Avoid becoming orphan stock on NASDAQ
• Lower listing cost- one prospectus for both
=> Access investors simultaneously in US and
Asia to enhance liquidity, valuation and
minimise listing cost
Share Price Performance on NASDAQ vs SGX
35
Cre ative N ASD AQ pric e ST Ass Na sda q price CSM N ASD AQ price
Cre ative SGX pric e
ST Ass SGX price
CSM SGX pric e
25
20
15
10
5
Aug 2000
Jul 2000
June 2000
May 2000
Apr 2000
Mar 2000
Feb 2000
Jan 2000
Dec 1999
Nov 1999
Oct 1999
Sep 1999
0
Aug 1999
Share Price (US$)
30
CSM Volume Traded on NASDAQ vs SGX
(adjusted for the difference in number of shares offered in the 2 markets)
5 0
CS M
Volume Traded
Millions
4 0
N AS D AQ v ol
CS M
S G X v ol
3 0
2 0
1 0
Total invitation: 250 mil shares
US & International offering : 225 mil shares
Singapore offering : 25 mil shares (10% of total invitation)
Aug 00
Jul 00
Jun 00
May 00
Apr 00
Mar 00
Feb 00
Jan 00
Dec 99
Nov 99
0
ST Assembly Volume Traded on NASDAQ vs SGX
(adjusted for the difference in number of shares offered in the 2 markets)
80
ST Ass NASDAQ vol
70
ST Ass SG X vo l
50
Millions
Volume Traded
60
40
30
20
10
0
Jan 00
Feb 00
Mar 00
Apr 00
May 00
Jun 00
Total invitation size : 170 mil shares
US & international offering : 153 mil shares
Singapore offering : 17 mil shares (10% of total invitation)
Jul 00
Aug 00
Thank You
SGX website: www.sgx.com