In mid-2022, the New York Stock Exchange (NYSE) and the Singapore Exchange (SGX) announced a collaboration to dual-list companies on both exchanges.
This agreement seeks to create an interconnected ecosystem that will open up access to capital and provide new investment products and services for market participants.
This is an exciting development, as the collaboration allows the two entities to perform these actions:
- Identify and develop new environmental, social, and governance (ESG) products and services
- Support index product development
- Explore new exchange-traded fund (ETF) products.
These actions have flow-on effects for the companies listing on these exchanges.
Of note, that means companies wishing to dual list on the NYSE and an Asian stock exchange can now choose between SGX and the Hong Kong Stock Exchange (HKEX), with the benefits of dual listing on either exchange carefully weighed up.
So, why should you choose Singapore for a dual listing instead of Hong Kong? First, let us look at what dual listing is, and what its benefits are for companies looking for accelerated growth.
How Do Dual Listings Work?
Dual listing refers to a strategy whereby a company lists or issues its shares on multiple stock exchanges.
A dual-listed company can gain exposure to new investors and tap into broader geographical markets. The stock price of such companies should also be the same after factoring in the exchange rate.
Dual Listing vs Secondary Listing: What is the Difference?
A dual listing is not the same as a secondary listing. A secondary listing refers to a situation where another exchange is used purely for trading.
The primary exchange continues to be responsible for listing and other regulatory matters.
Dual listings do not distinguish between primary and secondary, unlike a secondary listing, as both listings are considered primary.
Benefits of Dual Listing
Dual listing offers a myriad of benefits for companies. Here are some advantages that dual-listed companies can expect to gain:
Dual-listed companies can also expect round-the-clock trading, as the two exchanges are generally in different time zones. This allows for more efficient trading and more opportunities for investors to buy and sell shares in the company.
Access to Wider Pools of Capital
Dual-listing allows companies to tap into wider pools of capital in key markets outside of their home regions.
This can be especially beneficial for companies looking to expand internationally, as they can access capital from investors in different regions and gain exposure to new markets.
Greater Spread of Investors
Dual listing means companies can access a greater spread of investors, both institutional and retail.
This can be especially beneficial for companies looking to raise capital, as they can access a more diverse pool of potential investors.
Additionally, this can also increase the liquidity of the company’s shares, making it easier for investors to buy and sell shares in the company.
Benefits of Dual Listing With Singapore Rather Than Hong Kong
Singapore and Hong Kong are both renowned for being financial hubs in the region. So, what are the factors that make Singapore stand out against Hong Kong for companies seeking to dual list?
One of the main benefits of dual listing with Singapore rather than Hong Kong is its political stability.
Singapore enjoys a sound and transparent legal system, which ensures that companies operating within the country’s borders can do so safely and securely.
This means companies are less likely to be affected by any political upheaval in the region, which has been an issue of concern in Hong Kong in recent years.
Singapore is the second-most connected country in the world, located along strategic trade, shipping, and aviation routes. The country is well-connected to the rest of Asia and provides companies with easy access to key markets.
This makes it an ideal base for international business operations, providing a gateway from the West into some of the world’s most dynamic Eastern economies.
While in an advantageous geographic position to China, Hong Kong cannot compete with Singapore on global connectivity.
Singapore has had an odds-defying rise to the top of the global economy, which has been due to the famous foresight of the Singaporean Government over the last 50 years.
This has led to a country with one of the strongest economic positions in the world and provides dual-listed companies with access to a more secure and prosperous environment for their business operations.
Conversely, with political strife in Hong Kong, it has seen two recessions since 2019, making many companies think twice about their investments in the region.
Quality of Life
Whether it’s a place to live for company directors, or luring prospective talent, the quality of life in Singapore is almost unparalleled for expatriates.
In fact, Singapore ranks third in the Global Expat Essentials Index, beaten only by Bahrain (first) and the UAE (second). Compared to Hong Kong, Singapore offers a more welcoming and secure environment for those looking to do business and live there.
Ultimately, dual listing with Singapore rather than Hong Kong has clear advantages due to its political stability, connectivity, strong economy, and quality of life. Companies looking to raise capital should strongly consider these benefits when deciding where to list their shares.
This will ensure they have access to wider pools of capital and benefit from a greater spread of investors. Ultimately, this can help companies grow faster in international markets and increase liquidity in their shares.
Start Dual Listing in Singapore
If you’d like more information about dual listing, InCorp’s expert team is ready to help you make your move to the safe and prosperous shores of Singapore.
Our share registry team commands extensive experience in initial public offering (IPO), dual listing, and other related services.
Contact us to learn more today and take advantage of the many benefits listing on both the New York Stock Exchange and Singapore Exchange can offer.
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Frequently Asked Questions
- Yes, the Singapore Exchange (SGX) allows dual listing with the New York Stock Exchange (NYSE).
Some companies with dual listings include:
- Comba Telecom Systems
- AMTD IDEA Group
- Mandarin Oriental International
- It is ideal to engage the services of an experienced share registry team such as InCorp’s to help you ensure a smooth and successful dual listing.