(Yicai) Jan. 26 -- As the popularity of Singapore as a destination for Chinese companies’ secondary listings has increased, the Shenzhen and Singapore bourses have deepened ties to make it easier for listed Chinese firms to land on the Singapore Exchange.

The SGX has revamped its secondary listing framework, expanded its scope to include enterprises listed on the Shanghai and Shenzhen stock exchanges to meet Chinese enterprises’ demand for secondary listings, and shortened its approval process to around six to eight weeks, Huang Yaolong, executive vice president and head of equities at SGX Group, told Yicai at the Shenzhen-Singapore Capital Markets Cooperation and Exchange Conference on Jan. 20.

To attract more enterprises, the SGX is also offering a package of incentives through the Singapore government’s Equity Market Development Program, Huang noted. These incentives include a listing grant of up to SGD2 million (USD1.6 million), facilitation of connections with sovereign funds, such as Temasek, and support for market making and investor relations, he explained.

At the same time, Chinese institutions, including the Shenzhen Stock Exchange, have actively conducted roadshows in Singapore, helping 25 Shenzhen-listed companies with deep roots in the Southeast Asian market to connect with Singapore’s capital market.

Chinese companies already account for a considerable proportion of listed stocks on the SGX, an investment banking industry insider told Yicai. However, as many types of Chinese firms remain scarce targets in the local market, they have unique opportunities to attract Southeast Asian institutional investors.

In fact, Chinese companies have flocked to the SGX for secondary listings since the second half of last year, with US-listed Chinese stock exchange-traded funds debuting in Singapore via stock connect schemes for the first time.

For example, China Medical System Holdings completed its secondary listing on the SGX last July, and Yangzijiang Financial Holding spun off its maritime business unit for listing on the main board of the SGX last November. On Jan. 6, Concord New Energy Group launched a secondary listing on the main board of the SGX.

Moreover, a number of Chinese firms, including Wuxi Taclink Optoelectronics Technology, have unveiled their intentions to list in Singapore, moving forward with their global layout.

There are 15 US-listed Chinese stock ETFs listed on the SGX, with aggregate assets under management of about CNY7.5 billion (USD1.1 billion), accounting for nearly 10 percent of the total AUM of all ETFs on the SGX. Equity products equal 59 percent of these Chinese stock ETFs, whose AUM has registered a compound annual growth rate of 54 percent over the past five years.

The trend of listed Chinese companies to land on the SGX for secondary listings coincides with the shift in their overseas expansion strategies.

Chinese firms’ overseas expansion has become increasingly mature and diversified, with more and more small- and medium-sized enterprises venturing abroad, according to the 2025 Blue Book on Chinese SMEs Overseas Expansion, jointly released by China Investment Corporation Consulting and Standard Chartered Bank China.

Furthermore, the focus of their overseas expansion is gradually shifting from mature European and American markets to emerging economies such as Southeast Asia, the report also showed.

Looking ahead, many industry insiders hold a generally positive outlook for Chinese enterprises’ secondary listings on the SGX.

China will vigorously develop technology finance, green finance, inclusive finance, pension finance, and digital finance, shifting its focus to improving quality and efficiency from scale expansion, Loh Boon Chye, chief executive officer of SGX Group, said at the Shenzhen-Singapore Capital Markets Cooperation and Exchange Conference.

These strategic initiatives are highly consistent with and complementary to Singapore’s financial market development blueprint, Loh noted.

However, some market insiders believe that the Singaporean capital market’s relatively small scale, limited liquidity, and a small number of listed companies may restrict enterprises’ financing scale and exert an impact on the pricing of large initial public offerings and their subsequent liquidity.

Moreover, the SGX’s investor base is mainly composed of local and regional funds, Southeast Asian sovereign funds, and some international capital, which have a relatively limited understanding of and interest in Chinese enterprises, especially those in non-traditional industries, the insiders noted, adding that these factors could affect valuation levels and trading activity.

Editor: Futura Costaglione