[SINGAPORE] US-listed Grab might have been dual-listed in Singapore if the Singapore Exchange’s (SGX) latest push for dual listings was around at the time they went public on the Nasdaq in 2021.
On Wednesday (Nov 19), the local bourse unveiled two key changes aimed at boosting investor participation, attracting unicorns and energising market liquidity.
The first key change was the proposal of an SGX-Nasdaq dual-listing bridge, where companies with market values above S$2 billion will be able to list on both bourses using just one prospectus. At the time of its listing in the US, Grab had a multibillion-dollar market valuation.
The cross-border listing framework – scheduled to go live around mid-2026 – will differ from existing dual-listing arrangements, which require a different set of documents for each bourse.
Chee Hong Tat, minister for national development and Monetary Authority of Singapore review group chair, said the bridge would “enable issuers and investors alike to access liquidity simultaneously across both markets”.
At the same time, SGX also announced its intention to reduce the board-lot size from 100 units down to 10 units for securities priced above S$10.
A board lot is a standardised number of units of a company offered as a trading block. The unit could be shares for a normal company or stapled securities for a real estate investment trust (Reit).
The change will apply to ordinary shares, Reits, business trusts, company warrants, rights and depository receipts. Its aim, like the dual-listing bridge, is to reduce friction and increase the attractiveness of Singapore’s equities market.
As an illustration, the minimum trade for DBS will drop from about S$5,300 to about S$530 under the move.
Stocks that qualify for reduction of board lots
Currently, around 13 securities are listed on the SGX that are more than S$10. These include the three banks, DBS, UOB and OCBC, and other blue chips such as Keppel.
They represent around 40 per cent of the total market capitalisation of listed stocks.
According to SGX, counters which met the S$10 price threshold as at October were: Azeus Systems, DBS, Great Eastern, Haw Par Corp, Jardine Cycle & Carriage, Jardine Matheson, Keppel, Lonza Group, OCBC, Prudential, SGX, UOB and Venture Corp.
Ng Yao Loong, SGX Group head of equities, pointed out that although just about 13 stocks are affected by the change, they account for about 30 per cent of trading volume and 40 per cent of market capitalisation.
He also said the board-lot reduction aims to improve accessibility without going to an extreme of a one-share board-lot size.
“We don’t have a north star of reducing board-lot size to one share,” he said. “Eighty per cent of our listed companies trade at S$1 or below per share. If you look at other markets – such as the US – share prices are typically much higher.”
What investors need to know
In addition to smoothening the listing path for initial public offering (IPO) candidates, the dual-listing framework is also meant to drive liquidity by enabling continuous trading across time zones.
However, investors are somewhat limited by the boundaries of this framework – they will only be able to trade Singapore and US securities that apply to be dual-listed under the framework.
Impact on companies and SGX
“At first glance, these changes seem minimal,” said Morningstar equity analyst Roy Van Keulen. But he believes that new Singaporean companies looking to secure larger liquidity pools around IPOs will likely find the bridge “more attractive”.
He added that SGX would benefit as the framework prevents a complete loss of trading revenue to foreign exchanges, especially for fast-growing technology companies that would otherwise prefer to list overseas, if forced to choose between one exchange over the other.
JP Morgan Asset Management equity portfolio manager Ong Changqi concurred. “This new initiative will remove the dilemma (of having to choose), and allow our most exciting companies to tap liquidity pools in both locations.”
She added that the bridge is also likely to attract fast-growing Asian companies to list here, strengthening the competitiveness of Singapore’s equities market.
Singapore-based stocks that are already on the Nasdaq, such as Grab or Sea, may gain “spillover benefits” by helping to raise US investors’ awareness of Singapore’s “attractive opportunities”, said Fullerton Fund Management chief executive Jenny Sofian.
She expects the bridge to “attract greater participation from local and regional asset managers, as well as institutional and retail investors”. This will “further enrich” the depth and dynamism of the Singapore equities market.
US information technology companies could also be drawn in by the initiative, added Sofian, particularly those that are “significant by global standards, but perhaps less so relative to their Nasdaq peers”. She said the bridge could also be attractive for US companies that have significant links to Asia through customers or supply chains.
Despite the benefits, Morningstar’s Van Keulen said the change would likely have a minimal impact on trading volumes. “At the very small end of trading demand, there may be some change, but on the overall level, it’s typically not very noticeable.”
Sofian added that the new framework “does not change investor mobility or how investors need to consider currency risk”.
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