Singapore Exchange toughens rules to lure big listings

SINGAPORE - Singapore Exchange Ltd (SGX) is toughening its listing rules for initial public offerings (IPOs) to woo bigger brand name companies to list on its bourse.
 
"The new rules would allow the city-state to capitalise on the anticipated explosion in stock market launches coming to Asia in the next decade given the region's economic rise." said Singapore Exchange (SGX) chief executive Magnus Bocker.

By imposing more stringent admission rules, the bourse hopes investors will be convinced of the veracity and viability of the companies who are allowed to list, making the IPO a safer bet for them.

Under the new rules, to take effect on August 10, companies looking to list must have a market capitalisation of at least S$150 million based on the issue price if the firm have made a profit in its latest financial year and have an operating track record that stretches back at least three years.

The issuers must have operated for at least three years and recorded a minimum consolidated pre-tax profit of S$30 million for the latest financial year.

Firms with a shorter operating track record must have a market capitalisation of at least S$300 million based on the IPO issue price. All companies are also required to price their shares at a minimum of S$0.50 each.

The SGX, whose year has been marked by the delay of an up to S$3 billion listing by Formula One motor racing and the loss of football club Manchester United's IPO to New York, said the tighter rules would make it more attractive for larger firms to go public in Singapore.

Despite the loss of the high-profile Manchester United listing, SGX Chief Executive Magnus Bocker said there were no plans to make listing rules more flexible to accommodate sports teams or football clubs.

As Bocker told a press conference, "There is no way we will compromise the integrity of our market for any brand."

The English Premier League powerhouse is expected to raise $300 million in New York this month, where it will be allowed to have a dual-class structure of shares.