Chinese issuers facing delisting risk are seeking alternatives worldwide with the Singapore Exchange reportedly anticipating demand in the coming months.
In the coming months, Singapore Exchange (SGX) expects more listings by Chinese issuers that already trade American depository receipts (ADR), said the bourse’s chief executive Loh Boon Chye in an interview with «Bloomberg». This follows the recent listing of Shanghai-based electric vehicle firm Nio Inc. in May.
According to Loh, he expects fundraising to occur if market conditions are supportive for the rest of the fiscal year through June but if not, there could be technical secondary listings.
New York MOU
Last month, SGX signed an agreement with the New York Stock Exchange on various matters including the enhancement of collaboration on dual listings.
«It allows companies that are already listed to think of another overseas exchange, if they do want to, and the [memorandum of understanding] helps in terms of joint marketing,» Loh said.
US-listed Chinese firms face the risk of delisting over an ongoing dispute to allow audit access by the Public Company Accounting Oversight Board (PCAOB). While negotiations remain underway, US regulators have expressed limited optimism with five Chinese state-owned giants announcing voluntary delistings in New York last month.
Alternative Venue
In addition to Singapore, Hong Kong is expected to be a key beneficiary of Chinese delistings in the US. Switzerland is also another alternative venue that could be considered with four Chinese firms debuting their global depository receipts on the SIX Swiss Exchange last month following a 2019 agreement signed between the two countries to establish a stock link scheme.
Currently, there are at least 11 China-domiciled firms with listings in both the US and Singapore, according to Bloomberg data.
