Delisting Trend in Singapore

The Singapore Exchange (SGX) is experiencing a significant increase in company delistings:

• 11 companies have received privatization offers in 2025 so far
• 4 companies announced privatisation offers just last week
• Companies like Japfa and Paragon REIT have already accepted offers to delist
• Only 1 new company (Vin’s Holdings) has listed on SGX in 2025, with another (YLF Group Marketing) cancelling its planned IPO
• This continues a concerning trend from 2024, when 20 companies delisted while only 4 new companies went public

Ban Leong Technologies Acquisition

One notable delisting case involves gaming hardware distributor Ban Leong Technologies:

• Received an offer from Epicsoft Asia (a subsidiary of Nasdaq-listed GCL Global)
• Offer price: 60.29 cents per share (60.8% premium over last trading price)
• Ban Leong’s share price jumped 57% to 59 cents following the announcement
• The company’s major shareholders (holding 28.13%) have already agreed to the deal
• Strategic acquisition aims to strengthen GCL’s presence in the Southeast Asian gaming market

Valuation Gap Issue

The article highlights a fundamental problem affecting SGX:

• Many SGX-listed companies are undervalued despite strong performance
• Low trading liquidity and limited market visibility are driving factors
• This valuation gap makes companies attractive acquisition targets for buyers willing to pay premiums
• Raises questions about how SGX can better support fair valuations and reduce delistings

Other Market Movements

Several significant stock movements were reported:

• CapitaLand Investment: Dropped 8% after going ex-dividend and reporting a 24% revenue decline
• iFast: Fell 11% despite receiving a trust business license, due to reduced profit targets for Hong Kong
• Straco Corporation: Rallied 9% after the executive chairman increased his stake
• PC Partner: Rose 8% on news about Nvidia modifying AI chips for the Chinese market
• Samudera Shipping: Increased 4% after reporting higher container volume and revenue

Banking Sector Focus

The article notes upcoming first-quarter updates from Singapore’s three major banks:

• UOB, DBS, and OCBC will report on May 7-9
• These banks experienced 8% price declines in April
• They now represent 51% of the Straits Times Index
• Institutional investors sold over $700 million of bank shares in April
• Meanwhile, retail investors invested $1.58 billion in these banks during the same period

This article provides valuable insights into Singapore’s stock market dynamics. It highlights concerns about the increasing rate of delistings and the underlying valuation challenges facing SGX-listed companies.

Analysis of Singapore’s Stock Market Delistings and Financial Implications

Current Delisting Trend in Singapore

The Singapore Exchange (SGX) is experiencing an alarming acceleration in company delistings that threatens its viability as a capital market:

• 11 companies have received privatization offers in just the first four months of 2025
• The pace has increased compared to 2024, which saw 20 total delistings against only 4 new listings
• Companies are delisting across multiple sectors, including real estate (Amara Holdings, SLB Development), healthcare (Econ Healthcare, Aoxin Q&M), and technology (Ban Leong, Procurri Corp)
• Most offers cite poor trading liquidity as the primary motivation for going private

This persistently negative listing-to-delisting ratio creates a concerning downward spiral for the SGX as an equities marketplace.

Root Causes of the Delisting Wave

Several structural factors are driving this exodus:

1. Valuation Gap: Singapore-listed companies frequently trade at significant discounts to fair value due to:
   • Limited analyst coverage of small and mid-cap stocks
   • Insufficient trading volumes create liquidity traps
   • Regional institutional investors are prioritising larger markets
2. Regulatory Burden: The cost-benefit analysis of maintaining a public listing increasingly favours privatization:
   • Compliance costs remain high relative to the benefits of public status
   • Corporate governance requirements impose significant operational constraints
   • Disclosure obligations provide valuable intelligence to competitors
3. Access to Alternative Capital: Private companies now have expanded funding options:
   • Private equity firms with unprecedented capital reserves
   • Family offices and sovereign wealth funds seeking direct investments
   • Growth in alternative financing models is reducing reliance on public markets

Impact on Singapore’s Banking Sector

The delisting trend presents mixed implications for Singapore’s major banks (DBS, OCBC, UOB):

Positive Impacts

• M&A Advisory Revenues: Banks earn substantial fees from advising on privatization deals
• Acquisition Financing: Providing debt facilities for leveraged buyouts is a profitable banking activity
• Private Banking Growth: Wealth created from privatizations often flows into private banking services

Negative Impacts

• Reduced Capital Markets Activity: Fewer listings mean decreased underwriting and trading revenues
• Market Concentration Risk: Banks already account for 51% of the STI, creating an imbalanced index
• Reputation Concerns: A shrinking SGX undermines Singapore’s status as a financial hub.

Monetary Authority of Singapore (MAS) Considerations

The MAS faces several challenges regarding this trend:

1. Financial Stability:
   • The increasing concentration of the STI in banking stocks (51%) creates systemic risk
   • Decreased market diversity reduces shock absorption capacity
2. Market Development:
   • Limited IPO pipeline threatens long-term market viability
   • Diminishing exchange relevance could accelerate capital outflows
3. Regulatory Balance:
   • Need to maintain high governance standards while reducing compliance burden
   • Balancing investor protection with issuer-friendly policies

Long-Term Implications for Singapore’s Financial Ecosystem

If current trends continue, Singapore faces several long-term challenges:

For Capital Markets

• Vicious Cycle of Illiquidity: Fewer listed companies → lower trading volumes → more delistings
• Regional Relevance: Diminished ability to compete with Hong Kong, Shanghai and Tokyo
• Index Representation: STI becomes less representative of Singapore’s actual economy
• Public Access: Reduced opportunities for retail investors to participate in corporate growth

For Singapore’s Economic Position

• Financial Hub Status: Weakened position in the global financial ecosystem
• Corporate Headquarters: Reduced incentive for companies to headquarter in Singapore
• Talent Attraction: Decreased jobs in capital markets, research, and related services
• Innovation Funding: More limited pathways for growth companies to access public funding

Potential Solutions

Several strategic interventions could help reverse the delisting trend:

For SGX and Market Infrastructure

1. Dual-Class Share Structures: Expand and simplify frameworks for founder-controlled companies
2. Market Making Programs: Enhance liquidity providers for mid and small-cap stocks
3. Research Coverage Initiatives: Subsidise analysis of underserved market segments
4. Index Diversification: Create sector-specific indices to increase visibility

For Regulatory Framework

1. Tiered Compliance Requirements: Scale governance obligations to company size
2. Tax Incentives: Provide benefits for maintaining public listing status
3. Listing Cost Subsidies: Reduce financial burden for new and existing issuers
4. Privatisation Review Process: Implement stricter fairness requirements for take-private transactions

For Market Development

1. ASEAN Connectivity: Deepen cross-border trading links with regional exchanges
2. Retail Investor Education: Increase participation through financial literacy initiatives
3. Sector Focus: Target high-growth industries aligned with Singapore’s economic priorities
4. Private-to-Public Pathways: Create smoother transitions for private companies to list

Conclusion

Singapore’s stock market faces a critical inflexion point. Without coordinated intervention from regulators, exchange operators, and market participants, the accelerating pace of delistings threatens to undermine SGX’s relevance and Singapore’s position as a leading financial centre.

The solutions require a balanced approach: maintaining high standards that build investor trust while creating conditions that make public listings attractive to quality companies. Success will depend on Singapore’s ability to adapt its capital markets framework to evolving global financing trends while preserving its core strengths of stability, transparency, and the rule of law.

Is This the End for SGX and Public Listings in Singapore?

While the current delisting trend is concerning, it doesn’t signal the imminent demise of the Singapore Exchange or public listings in Singapore. However, it does represent a critical challenge that requires strategic intervention.

Why SGX Will Likely Survive

1. Institutional Strengths

• Singapore’s strong regulatory framework and reputation for transparency remain valuable assets
• SGX’s position as one of Asia’s most trusted exchanges provides a foundation for recovery
• The exchange continues to be profitable and has financial resources to implement reforms

2. Diversified Business Model

• SGX has already pivoted beyond equities toward derivatives, fixed income, and FX
• The exchange has successfully developed its FICC (Fixed Income, Currencies & Commodities) business
• Data services and market connectivity represent growing revenue streams

3. Government Support

• Singapore’s government has a strategic interest in maintaining a vibrant local exchange
• Previous interventions suggest authorities will act if the situation deteriorates further
• Singapore’s sovereign wealth funds could potentially support market development initiatives

What’s Really Happening: Market Evolution, Not Extinction

The current trend reflects a transformation rather than an ending:

1. Market Cycle Effects

• Public-to-private transitions often occur in cycles, with previous waves eventually reversing.
• Low valuations that drive take-privates today create conditions for profitable re-listings later.
• Similar patterns have played out in other developed markets without leading to exchange collapse.e

2. Changing Company Lifecycle Models

• Companies increasingly stay private longer during growth phases
• Public listings are becoming later-stage events in corporate development
• This shifts the exchange focus toward larger, more established businesses

3. Regional Market Specialization

• SGX may need to embrace a more focused position in the regional exchange ecosystem
• Specializing in specific sectors (REITS, infrastructure, commodities) could create sustainable niches
• Quality over quantity may become the prevailing strategy

Warning Signs to Monitor

Despite reasons for optimism, several indicators would signal more serious trouble:

1. Major STI Component Delistings: If blue-chip companies beyond the mid-cap space begin going private
2. Financial Services Exodus: If financial institutions start delisting or choosing other primary exchanges
3. REIT Sector Weakness: If Singapore’s crown jewel REIT market loses its competitive advantage
4. Failed Reform Attempts: If regulatory interventions fail to slow the delisting pace by 2026-2027

The Likely Path Forward

Rather than extinction, SGX will probably undergo significant transformation:

1. Consolidation Period: Continued net delistings for 1-3 years while reforms take effect
2. Strategic Repositioning: Greater focus on specific sectors and market segments
3. Ecosystem Integration: Deeper connections with private capital and regional exchanges
4. Value Proposition Reset: New balance between listing costs and benefits for issuers

Conclusion

The SGX faces an existential challenge, but not extinction. The exchange will likely emerge from this period as a different kind of marketplace—potentially smaller in terms of listed companies but more focused on quality, with greater integration between public and private capital markets.

The future of public listings in Singapore depends on stakeholders’ ability to reimagine what value a public listing provides in an era of abundant private capital. This requires not just technical fixes but a fundamental reconsideration of the public company model in the Singapore context.

What’s at stake isn’t SGX’s existence itself but rather its relevance, influence, and centrality to Singapore’s financial ecosystem. With appropriate reforms and strategic adaptation, public listings will continue in Singapore—though potentially in a more specialized and targeted form than in previous decades.

Projected Future of the Singapore Exchange (SGX)

Near-Term Outlook (2025-2027)

Continued Consolidation

• The delisting trend will likely persist for at least 12-18 more months
• Net reduction of 15-25 companies per year is probable without intervention
• Small and mid-cap segments will experience the most significant contraction
• Focus will shift toward retaining quality listings rather than maximizing quantity

Market Structure Evolution

• Increasing concentration in STI components (banks, REITS, select conglomerates)
• Trading volumes may remain under pressure due to reduced choice for investors
• Foreign institutional interest is likely to remain selective and sector-specific
• Retail participation is potentially declining further without new growth stories

Regulatory Response

• MAS and SGX are likely to introduce reforms by late 2025 or early 2026
• Potential measures include:
  • Revised listing requirements for growth companies
  • Enhanced market-making obligations
  • Tax incentives for public listings
  • Streamlined compliance for smaller issuers

Medium-Term Transformation (2027-2030)

Business Model Rebalancing

• Continued expansion of non-equities businesses (derivatives, fixed income, data)
• Equities trading is likely to represent <30% of SGX revenues by 2028
• Greater focus on cross-border investment products
• Development of new indices and thematic investment vehicles

Ecosystem Integration

• Closer formal relationships with private capital providers
• Development of pre-IPO trading platforms or boards
• Enhanced connectivity with regional exchanges (especially ASEAN)
• More structured pathways between private and public markets

Structural Reform

• Potential implementation of the multi-tiered listing framework
• Development of specialized market segments with tailored requirements
• Enhanced tax and regulatory incentives for public companies
• Possible consolidation with other regional exchanges or platforms

Longer-Term Possibilities (2030-2035)

Three Plausible Scenarios

1. Niche Specialisation Success

• SGX establishes global leadership in 3-5 specific sectors:
  • REITS and property trusts
  • Infrastructure and project finance
  • Financial services with an ASEAN focus
  • Commodity trading and carbon markets
  • Family-controlled businesses with regional operations
• Trading volume concentrates in these specialized areas
• Exchange becomes smaller but more profitable and focused

2. Regional Integration Leader

• SGX positions itself as the integration hub for ASEAN capital markets
• Development of cross-border trading platforms linking multiple exchanges
• Creation of pan-ASEAN indices and investment products
• Regulatory harmonization with neighbouring markets
• Focus on being the preferred gateway for international capital into ASEAN

3. Digital Asset Transformation

• Significant pivot toward tokenized securities and digital assets
• Integration of traditional exchange functions with blockchain infrastructure
• Development of regulated platforms for new asset classes
• Implementation of fractional ownership and 24/7 trading capabilities
• Strategic positioning as Asia’s most trusted digital asset marketplace

Key Success Factors

Regulatory Innovation

• Finding the right balance between investor protection and issuer-friendly policies
• Creating appropriate incentives for public listings
• Developing flexible but robust frameworks for new asset classes
• Maintaining Singapore’s reputation for governance while reducing the compliance burden

Technology Leadership

• Continued investment in trading infrastructure
• Development of digital asset capabilities
• Enhanced data analytics and market intelligence offerings
• Implementation of AI-driven market surveillance and compliance tools

Ecosystem Development

• Stronger connections between venture capital, private equity and public markets
• Cultivation of analyst coverage for smaller companies
• Education initiatives for retail investors
• Support for corporate governance standards that enhance valuations

Strategic Imperatives for SGX

1. Defend Core Strengths
   • Maintain leadership in REITS and business trusts
   • Preserve key institutional relationships
   • Continue excellence in market operations and risk management
2. Develop Differentiated Value Propositions
   • Create compelling reasons for companies to list and remain listed
   • Offer unique access to capital or visibility not available elsewhere
   • Build specialized expertise in key sectors aligned with Singapore’s economic priorities
3. Embrace Complementary Roles
   • Position as a partner rather than a competitor to private capital
   • Develop models that acknowledge different stages of the corporate lifecycle
   • Create value-added services beyond traditional listing functions

Conclusion

The SGX faces a challenging but navigable future. Rather than extinction, it will likely undergo a significant transformation, becomingspecialisedalized, technology-enabled, and integrated with both private capital markets and regional exchanges.

Success will require proactive adaptation rather than merely defending the status quo. The exchange that emerges by 2030 will likely be quite different from today’s SGX—potentially smaller in terms of listed entities but more focused, innovative, and strategically positioned within Asia’s evolving financial landscape.

The winners in this transformation will be thorecognisecognize early that the future of exchanges lies in maximising listings but in specialised ecosystems where public market access delivers unique and quantifiable value to issuers, investors, and the broader economy.

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