Chinese Firms Look to Singapore Listings as Gateway for Market Expansion Amid Trade War

SINGAPORE – At least five enterprises originating from mainland China or Hong Kong have expressed their intention to conduct initial public offerings (IPOs), dual listings, or share placements in Singapore within the coming 12 to 18 months. This information comes from four sources who mentioned this trend among Chinese businesses aiming for expansion into Southeast Asia amidst current global trade disputes.

A Chinese energy firm, a Chinese healthcare conglomerate, and a biotechnology group based in Shanghai are among those included, stated the sources with firsthand information about the situation; however, they opted to remain anonymous and refrained from disclosing the names of these entities since the proposals are still under development.

These listings could provide a significant uplift to the Singapore Exchange Limited (SGX). Even though SGX remains a favored destination for income-focused investments like Real Estate Investment Trusts, it has faced challenges in drawing major initial public offerings and increasing trade activity.

In 2024, SGX listed only four initial public offerings as per its official site. In contrast, its competitor, the Hong Kong Exchanges and Clearing Ltd., documented 71 new company listings.

Jason Saw, who leads the investment banking group at CGS International Securities, mentioned that Chinese firms are considering accessing the Singapore stock exchange as they aim to either penetrate or amplify their presence in the Southeast Asian market during the ongoing trade dispute with the U.S.

President Donald Trump of the United States introduced tariffs amounting to 145% on imported Chinese products, prompting China to retaliate with increased duties of up to 125% on American goods. However, they consented to a temporary halt over the past weekend for a period of ninety days. Nevertheless, doubt persists due to the set timeframe and the erratic nature of the Trump administration’s policies.

Inquiries regarding listings on SGX surged dramatically following Trump's escalation of trade measures against China, according to Saw.

"The coming years and decades will see Chinese gateways to the world becoming increasingly significant," stated Pol de Win, who serves as the senior managing director and head of global sales and origination at SGX.

"Singapore serves as a crucial hub for trade and commercial activities moving from China to global markets, with listings in Singapore being a significant part of this process." Dewin didn’t discuss the listing intentions of Chinese and Hong Kong companies.

'GROWING INTEREST'

A division of the Chinese state-owned securities firm China Galaxy Securities, CGS International, is collaborating with at least two domestically based firms to potentially go public on the Singapore Exchange before the end of this year. Saw shared this information but chose not to disclose the names of these companies.

One source indicated that some mainland Chinese and Hong Kong firms might be able to generate approximately $100 million through primary listings in Singapore.

SGX typically isn’t the preferred option for Chinese firms looking to make their initial public offering overseas. They generally favor Hong Kong because of Beijing’s backing and a substantial base of both institutional and individual investors who are well-acquainted with Chinese brands.

Efforts by Beijing to strengthen relationships with Southeast Asian countries, against the backdrop of rising tensions with Washington, have prompted several Chinese enterprises to expand their footprint in the area, according to capital market advisors.

The listing schemes in Singapore were introduced following the city-state’s announcement in February aimed at bolstering its equity market. These initiatives featured a 20% tax break for initial listings and pledged additional steps would be revealed in the latter part of 2025.

Ringo Choi, EY's Asia Pacific IPO Leader, stated that these measures aim to increase enthusiasm for the domestic IPO market. He further noted that Singapore’s “political stability and impartial position” regarding global political issues could be attractive to businesses.

Few anticipate Singapore quickly narrowing the gap with Hong Kong in equity listings, attributed to elements such as Singapore's more cautious investor base and tighter listing regulations.

"The managing director of a Singapore-based global software firm stated that 'it needs to be simpler for businesses, particularly tech firms, to go public,'” remarked an executive from a similar corporation, preferring anonymity since they were unauthorized to address the press.

Largely, the startups in this area have their headquarters in Singapore; thus, this would likely be where they choose to list.