Here’s What Singapore Exchange Limited Said on Attracting IPOs, Rising Privatizations and the Baltic Exchange

Singapore Exchange Limited (SGX: S68) fielded a bevy of questions during its latest webcast.

There were a number of questions in minds of investors and analysts. This ranged from the number of privatizations recently, how SGX was going to attract more initial public offerings (IPO) and the potential acquisition of the Baltic Exchange.

Loh Boon Chye, SGX’s chief executive, was on hand to share his thoughts around these three matters.

Rising Privitisations?  

Over the past few years, there has been a number of high profile privatisations. Last year, Keppel Corporation Limited (SGX: BN4) brought Keppel Land back under its umbrella. The prior year also saw Popular Holdings being taken private as well.

Loh responded:

“On privatization, we see the delisting of listed companies as a natural occurrence of any full functioning capital markets. This is really for the boards of the companies and the shareholders to debate and decide.”

Where will IPOs come from?

The Singapore exchange has had a bit of a drought in IPOs since the start of this year. A question was posed on how SGX can attract new listings to Singapore’s stock market. Loh added his thoughts around this matter:  

“For the IPO markets, we are focusing on some of our core sectors and emerging sectors that are strong. To market that to prospective companies that meet the strengths of this sector. For example, we have always been strong in REITs [real estate investment trusts], in marine and offshore, minerals, oil and gas – facing some headwinds – but the health-care and consumer sectors has been strong for us. So, we like to look at sector strengths and marketing to companies on those strengths to try to create the flow for IPOs.”   

As Loh points out SGX has a strong REIT market. A recent report from the bourse operator revealed that there are 29 REITs and six stapled trusts listed here.

The Baltic Exchange

In late February this year, SGX confirmed that it had submitted a bid to buy the Baltic Exchange. For a bit of background, the Baltic Exchange is a privately owned company with an international community of 600 member firms. It deals mainly with market information for trading and settlement of physical and derivative shipping contracts.

Loh said that the talks are ongoing and confidential. However, he did say this as well:

“We are encouraged by the recognition of the natural fit between the Baltic Exchange and the SGX. SGX is the leading Asian exchange as a partner to the Baltic Exchange for a while. We have a partnership in the forward freight agreement contracts. And Baltic Exchange being the global leading provider of the global maritime leases, we see that this is natural fit to our commodities business.”

In its current state, the acquisition might not move the needle for Singapore Exchange’s topline and bottomline.  

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns shares in OSIM International.