* Strong pipeline of Chinese stock listings seen in Singapore
By Chua Baizhen
SINGAPORE, Nov 9 (Reuters) - A strong flow of stock listings
by Chinese firms in Singapore is likely to continue despite
worries over Beijing's strict rules cutting approvals for public
offerings abroad, Singapore Exchange <SGXL.SI> said on Friday.
The city-state's bourse operator said China, which has
required approval for its firms listing overseas for the past
year, may relax regulations in an effort to pump foreign capital
into Chinese companies.
"We are still very positive about China listings -- there's
still a strong interest from China," Lawrence Wong, head of
listings at Asia's second-biggest listed bourse operator, told
Reuters in an interview.
SGX has been looking to attract foreign listings -- which
make up almost 40 percent of the 740 firms listed -- to overcome
the limited potential of Singapore's small domestic market, and
in line with the city-state's plan to position itself as a
regional centre for financial services.
Chinese companies seeking listings abroad have needed to
obtain approval from the China Securities Regulatory Commission
since September 2006, a move seen aimed at promoting China's
domestic Shenzhen and Shanghai stock exchanges.
Companies incorporated outside of China before the cut-off
date were exempted from the new system, which has kept Chinese
listings in Singapore flowing this year, but industry sources
have said these listings could dry up.
Since September last year, no Chinese companies falling under
the rule that applied for a Singapore listing have got the green
light, said Bernard Lui, a director at Stamford Law Corporation,
who works with these firms.
But Wong said he is not concerned because SGX thinks the
Chinese regulator will respond to the need for foreign funding as
more companies ride on the country's blistering growth.
"We don't think any one exchange within or outside of China
would be able to fulfil this need," he said. "Rules are rules,
but one has to look at how China will evolve and move forward."
He said Chinese officials who came to Singapore were still
very keen for Chinese companies to raise capital overseas.
In the near term, Wong said data showed no slack in the
number of recent Chinese listings, which make up the bulk of
foreign firms looking to go public in the city-state.
Out of 22 new IPOs in July-September 2007, 14 were for
Chinese companies, compared to just 2 out of a total of 8 IPOs
during the same period in the last financial year.
The total market capitalisation for the IPOs in that quarter
rose to S$2 billion ($1.4 billion), more than double the S$779
million last year.
"We are looking at the big-picture point of view -- how China
will grow, what will be the capital needs for China," Wong said.
But he said while China continues to be important, SGX is
also looking at other regions.
"Certainly Southeast Asia. They are our immediate neighbours,
we understand them, they understand us," he said, adding that
India and Japan also have many companies looking to go public.
In April this year, SGX signed an agreement with Vietnam's
stock exchanges to help Vietnamese companies seek capital through
Singapore listings. Leading dairy product maker Vinamilk <VNM.HM>
said in early March that it would list shares on SGX this year.
Among recent non-Chinese foreign listings, Japan's Saizen
Real Estate Investment Trust raised $137 million, while India's
Mercator Lines <MRCT.BO> is planning an IPO worth up to $150
million.
SGX, which has a market cap of $11 billion, ranks behind Hong
Kong Exchanges and Clearing Ltd <0388.HK> in Asia-Pacific, having
overtaken the Australian Securities Exchange <ASX.AX> this year.
((Editing by Neil Chatterjee, [email protected]; Reuters
Messaging: [email protected]; +65 64035658))
($1=1.442 Singapore Dollar)
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Keywords: SINGAPORE EXCHANGE IPO/