(Yicai) Sept. 24 -- A growing number of Chinese businesses regard Singapore as a forward base for entering the Southeast Asian market, with the Singapore Exchange providing a friendly and efficient capital window for them, according to Chief Executive Officer Loh Boon Chye.

SGX is particularly suitable for companies looking to expand in Southeast Asia and find medium-to long-term growth opportunities, Loh told Yicai in an a recent interview. The bourse is not just a financing channel, but also a strategic platform for Chinese enterprises to integrate into the Southeast Asian industrial chain, he added.

In fiscal 2025, six new companies got listed on the SGX, raising a total of SGD25.7 million (USD20 million). Insiders expect at least five Chinese firms to go public, complete a secondary listing, or launch share placements on the bourse in the next 12 to 18 months.

The SGX has about 600 listed companies, with a total market capitalization exceeding USD600 billion. About 20 percent of them are from China, covering various sectors, including industry, consumer goods, and real estate investment.

However, compared to the Hong Kong Stock Exchange, the SGX has limited liquidity and a relatively smaller market size. Last year, Singapore had only four initial public offerings, far below Hong Kong’s 71. In the first half of this year alone, the HKEX added 43 IPOs.

The institutional advantages and currency flexibility of the SGX are highly attractive to Chinese companies expanding in Southeast Asia and optimizing their international capital structures.

Experts believe that companies opt to list on the SGX to use Singapore as a strategic hub for Southeast Asia, while they choose the Hong Kong and US bourses for greater financing and access to global capital.

“The Singapore dollar is highly internationalized, has controllable exchange rate risks, and the local environment for cross-border capital flows is extremely convenient,” the head of a Shanghai-based company expanding overseas told Yicai.

For businesses, the SGX is more than just a financing platform, the boss noted, adding that Singapore is a crucial launching pad for entering the Southeast Asian supply chain and implementing localized strategies.

Beyond corporate listings, the SGX is also strengthening its efforts in global capital market cooperation and financial product innovation. In May 2023, the SGX and the Shanghai Stock Exchange signed a memorandum of understanding on exchange-traded funds connectivity.

As of July 31, 10 cross-border ETF products had been listed under the China-Singapore ETF Connect mechanism, with total assets under management surpassing CNY3 billion (USD421.4 million).

International investors have a constructive view of the Chinese market for its great performance in the past months, Chye noted. Both the FTSE China A50 Index Futures and the USD-CNH foreign exchange derivatives have seen significant growth in trading activity.

On one hand, international investors continue to maintain a sustained focus on China’s traditional advantages in sectors such as manufacturing and infrastructure. On the other hand, they have shown a strong interest in new industries, including new energy and technological innovation.

Editor: Futura Costaglione