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Global trade has significantly transformed in recent years, with the Singapore and New York exchanges often leading the way.
In a joint venture of progress, an agreement signed in July 2022 between the two exchanges has effectively opened the floodgates for Singapore to a new era of international investment opportunities.
In short, the dual listing will allow companies to be listed on both the Singapore Exchange (SGX) and the New York Stock Exchange (NYSE) simultaneously.
This means that companies wishing to access global capital via two markets will now have the ability to do so through one platform.
The significance of this agreement cannot be understated, so let’s look at how companies can take advantage of this new listing arrangement.
A Summary of the Singapore Exchange (SGX)
The SGX is Asia’s most international multi-asset exchange, operating securities, fixed income, and derivatives markets. It has become a hub for trading in the Asia-Pacific region, attracting investors worldwide looking for an English-speaking bridge from West to East.
The exchange has played a critical role in promoting the growth of the Singapore economy and facilitating trade between Singapore and other countries. As of February 2022, The SGX had 672 listed companies.
A Summary of the New York Stock Exchange (NYSE)
The NYSE is the world’s largest exchange by market capitalisation, providing a platform for trading in equities, bonds, and other financial instruments.
It symbolises American economic power and has played a crucial role in shaping the global financial system. As of June 2022, the NYSE had a total of 2,584 listed companies, of which 2,363 were domestic, and 221 were international.
Dual Listing Agreement: Explained
The dual listing agreement between the Singapore and New York exchanges provides an attractive option for companies looking to IPO.
Under this agreement, companies listed on the NYSE can apply for a secondary listing on the SGX or vice versa.
By listing on both stock exchanges, companies can reach a wider pool of investors and potentially raise more capital than they would have by listing on only one exchange.
The dual listing agreement allows companies to maintain a presence in both markets and tap into the liquidity of both exchanges. This can result in a more stable investor base and a higher valuation for the company.
The agreement also facilitates the creation of new investment solutions to meet the growing needs of capital market investors and participants.
What Does Dual Listing Mean For Companies Looking To IPO?
For companies looking to go public, dual can provide numerous benefits for companies looking to IPO and grow their business.
One of the primary benefits of dual listing is increased exposure. By listing on multiple exchanges, companies can tap into a wider pool of investors and increase their visibility in new markets.
This can provide access to new sources of capital, which can be critical for companies looking to fund expansion or pursue strategic acquisitions. Additionally, dual listings can increase the liquidity of a company’s shares as investors from multiple markets can trade the shares.
Another benefit of dual listing is the ability to diversify a company’s investor base. By listing on multiple exchanges, companies can attract a more diverse group of investors, reducing their reliance on any one market or investor group.
This can provide increased stability and resilience, particularly during market volatility or uncertainty.
In addition, dual listing can provide tax benefits for companies. In this case, Singapore offers a multitude of tax incentives for companies that list on their stock exchange, which can provide cost savings for the company and increase shareholder value.
This can make dual listing an attractive option for companies looking to optimise their financial performance.
For companies looking to expand into new regions (in this case, Asia), dual listing can provide a foothold in new markets and a means to access local capital.
This can be particularly valuable for companies in industries that are experiencing rapid growth in emerging markets, such as technology or renewable energy.
Benefits of Dual Listing in Singapore
Dual listing in Singapore provides several specific and unique benefits to companies looking to IPO. Firstly, the country’s strategic location and political stability provide access to the fast-growing Asia-Pacific market.
Situated in an ideal location along strategic trading, shipping and aviation routes, Singapore is the second most connected nation on Earth. It has strong links to other Asian areas which allows companies effortless access to key markets across Asia.
The country’s robust legal and regulatory framework and its business-friendly environment make it an attractive destination for businesses seeking to expand their operations in the region.
This includes access to a wide range of tax incentives and other government support for companies listing on the exchange.
Furthermore, the dual listing agreement allows companies to benefit from the different investment styles and objectives of investors in both markets.
Singapore, as of 2023, is the freest economy in the world. Hence, companies listing in Singapore may expect to have better or more varied access to capital in comparison to the United States (US) market.
This can result in a more stable investor base and a higher valuation for the company.
What’s Next for Dual Listing in Singapore?
The dual listing agreement between the Singapore and New York exchanges is a significant development for companies looking to IPO.
It gives them greater access to two of the world’s largest and most liquid markets, allowing them to raise capital more efficiently and at a lower cost.
Singapore’s business-friendly environment, robust regulatory framework, and diverse range of listings make it an attractive destination for businesses looking to list.
A shining example of Singapore’s famous foresight, we believe that this agreement will further enhance Singapore’s position as a leading financial hub in Asia and beyond.
FAQs About Dual Listing in Singapore
- One example is the SGX, which provides dual listing opportunities for companies through its agreement with the NYSE.
- A dual listing involves a company going public on multiple exchanges, while a secondary listing involves a company listing its stock on another stock exchange that is not its primary listing.
- There are certain listing requirements that companies seeking to dual-list must comply with. Let our share registry experts guide you!’
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Rikvin’s content team includes in-house and freelance writers across the globe who contribute informative and trending articles to guide aspiring entrepreneurs in taking their business to the next level in Asia.