Norwegian shipping firm Golden Ocean has been listed in both Singapore and the Norwegian capital, Oslo, for over a year. But it is a lonely existence, being the only such dual listing.
The collaboration between the Singapore and Oslo courses had been aimed at accelerating the listing process for secondary listings and reduces the regulatory burden of being listed on two exchanges. It also helps give companies the benefits of share trading in two time zones and access to a more diverse pool of investors.
CEO of the Singapore Exchange Magnus Bocker said “We both had hoped for more companies, especially when we established this cooperation more than two years ago. We are still as enthusiastic as we were at the time; the tide however has not been fully with us since.”
Oslo Stock Exchange CEO Bente A. Landsnes agreed saying that disappointed was an understatement because when they agreed to sign the partnership in 2009, the financial crisis had already happened, so they knew in 2009, the market was very turbulent and it was difficult for companies to start listing.
“What we didn’t know was that the turbulence would continue like it has done over a long period of time. And here in Asia, it hasn’t been affected in the same way as Europe and US but it’s still difficult (for) IPO markets globally,” she said.
According to the Oslo Bors, a pipeline of at least 10 Singapore companies are waiting to list in Norway. Most of them are in the offshore, marine and energy sector. But many are delaying their plans on concern the market will value them down.
DnB NOR Markets Head of Investment Banking (Asia) Joachim Skorge said they still see strong interest need to see a stronger market, so transactions would be less diluted.
“Most companies would like to have a clear use of proceeds before they go into the market, because most companies are reluctant to do dual listing,” he said.
“A lot of companies in shipping and offshore feel that their stock price is not really reflecting the fundamental values of the company, both on an earnings basis and on a net asset value basis,” he added.
Despite the market uncertainty, there may still be a case for Singapore companies to consider dual listing in Europe now. Companies based in Southeast Asia may seem even more attractive to Western investors, who may now favour companies with an Asian growth story instead of their own domestic stocks.
