Published: Friday August 3, 2012 MYT 2:10:00 PM
Dual listings enhance region's attraction as capital bloc
SINGAPORE: Dual listings can enhance the region's attraction as a capital bloc to rival Hong Kong, China and India, says Frost and Sullivan vice-president for Asia-Pacific business financial services, Sanjay Singh.
He said these could benefit regional companies that sought to portray a more international presence, enlarge/diversify their investor base, gain access to additional capital as well as have better liquidity for their shares.
"Investors will now be able to gain access to the markets in these countries with lower transaction costs. At the regional level, this can enhance the region's attractiveness as a capital bloc," he told Bernama here on Friday.
Sanjay said this when asked on the benefits of the recent concurrent listings of IHH Healthcare on the Main Market of Bursa Malaysia Securities Bhd and the Main Board of Singapore Exchange Securities Trading Ltd (SGX-ST).
He said for SGX-ST, the dual listings would provide an opportunity to strengthen its position by attracting both global and regional companies to list here and benefit from a more globally-oriented pool of investors both institutional and retail.
However, Sanjay cautioned companies seeking dual listings to be mindful of the differences in regulations, corporate governance issues as well as the level of disclosures needed and the additional time and investments needed for the same.
"Companies pursuing this option would also need to ensure that they secure cornerstone investors to ensure that the listing is successful.
"In some instances, it may also require the company to have two legal entities listed on the two separate stock exchanges but carrying on business as one economic entity.
"This may prove to be quite cumbersome from an operational and regulatory perspective. So one needs to carefully evaluate the pros and cons of the dual listings," he said.
He said the establishment of the Asean trading link initially between Singapore and Malaysia followed by Thailand was also expected to provide a stimulus from a retail investor standpoint. - Bernama