Sept. 16 – The Japanese firm Xyec Holdings announced plans this month to raise capital on the Singapore Exchange’s (SGX) Catalist board. Xyec, an IT and manufacturing-focused holdings company, will be the first Japanese firm to list exclusively in Singapore, bypassing its own domestic stock market completely.
Singapore and other ASEAN countries have increasingly seen foreign companies listing on their stock exchanges as slower-economy enterprises seek to harness the full potential of the ASEAN economy.
“We want to increase our regional presence and capture good talent that we may not be able to get if we remained in Japan,” said Manabu Kobayashi, CEO of Xyec Holdings.
Xyec Holdings chose to list on a foreign bourse due to domestic economic concerns, such as a shrinking population and declining demand in Japan, according to Mr. Kobayashi.
“Singapore is becoming a hub for Asia, and we thought listing in that country would earn us recognition,” he further commented.
Listing in Singapore provides several benefits to companies operating in slower economies. Listing abroad allows companies to access international investors while building credibility in the foreign market.
“Listing abroad would lead to increased presence in the region as well as credibility, making it easier for the company to find staff,” said Tamami Ota, an economist from the Daiwa Institute.
Singapore has implemented several favorable policies to attract foreign listings. These include dual-currency trading (the ability to buy and sell shares using any of several currencies, including the RMB), and softer financial requirements, such as the ability to list without an earnings track record.
“We expect to see more and more companies listed here from overseas and it could be a majority. This may happen within the next five years,” said SGX Head of Listings, Lawrence Wong.
In total, there are 302 foreign companies listed on the SGX, representing almost 40 percent of all enterprises on the Singaporean bourse.
As the global economy continues its slow progress, the ASEAN region has seen increased growth and is projected to expand 5.6 percent this year by the International Monetary Fund. The ASEAN bloc is also expected to outperform the broader Asia-Pacific region, according to a report released by Standard & Poor’s.
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