SGX Wants to Woo Private Firms in Region to List in Singapore

Grab and rival GoTo are examples of such companies going public on other bourses

- Chor Khieng Yuit

Private equity players that have built up businesses and are poised to cash out are being wooed by the Singapore Exchange (SGX); and one way to discover these businesses is through research reports.

There are around 80 to 100 such private companies in the region in sectors ranging from consumer to industrial to technology, noted Mr Chan Kum Kong, head of research at SGX Group.

Mr Chan told The Straits Times in an exclusive interview: "There is a lot of money in the private market that has been invested by private equity (PE) funds."

These funds typically invest in the companies over a period of five to six years. When these firms start to mature over the following four to five years, the PE players explore various exit options, including an initial public offering.

Ride-hailing and food delivery player Grab, which listed on the US Nasdaq on Dec 2, 2021, is a recent example of a PE-backed exit. Grab's rival GoTo is another example, listing on the Indonesia Stock Exchange in 2022.

SGX expects more such listings and is laying the groundwork.

Mr Chan said SGX wants to start research coverage of private market companies and sectors so that the information is already available when these firms are ready to list.

Bankers handling the listing will need to understand these companies and the sectors they are in, while investors will have to be familiar with them and their business models, he added.

Investors will have a range of questions, such as what the firm's market size is, its share of that market and whether it is a market leader or a challenger.

It is thus timely that the Monetary Authority of Singapore (MAS) is setting aside $50 million over the next three years to bolster the Grant for Equity Market Singapore (Gems) scheme.

Gems provides funding for issuers to defray listing-related expenses and to incentivise analysts to produce research reports on companies in Singapore's equity market.