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Saturday, Feb. 12, 2011
Japan firms mine Singapore for funds
SINGAPORE (Kyodo) An increasing number of Japanese companies are showing strong interest in raising funds on the Singapore bourse, which has emerged as one of the region's most competitive.
A wave of public listings by Japanese companies is expected this year in line with their trend to tap Asian exchanges and overcome the weak fundraising environment in Japan, and to ride on the back of the region's rapidly growing economic power.
"A lot of growth companies are seeking funding outside Japan mainly because they can't raise money in Japan," said Tomoyasu Maruyama, a partner at the international audit firm Deloitte Touche Tohmatsu LLC.
"Now Asia is one of the growth engines and the market for them to grow their business. To expand their business in Asia, it's better for them to raise funds in Asia," Maruyama said.
The Singapore Exchange, known for its trading in a variety of derivative securities, is particularly attractive because of the aggressive measures it has taken to boost its competitiveness and because of Singapore's position as a launchpad to Southeast Asia and India.
Maruyama said about 10 Japanese firms are seeking listings.
They include restaurant chains planning to expand their business in the region to take advantage of the popularity of Japanese food in Southeast Asia, and health care companies lured by the strong growth in medical tourism in the region.
The Singapore Exchange has been marketing itself aggressively as an international bourse.
Today, about 40 percent of its 782 listed companies are from overseas, and of them nearly 70 percent are from mainland China, Hong Kong and Taiwan. According to the bourse, only 10 Japanese companies are currently listed.
Analysts say due to its strategic location and economic link, Singapore is a strong choice for companies eyeing the Southeast Asian and Indian markets. In comparison, the Hong Kong stock market tends to be seen as a gateway to mainland China, while the South Korean market is more domestically driven.
To boost its competitiveness, the Singapore bourse announced in October a merger with the Australian stock exchange to create the world's fifth-largest listed exchange group.