Companies leaving stock exchanges are common occurrences worldwide, but the spate of departures in Singapore coincided with a dearth of IPOs, low confidence in the local equities market and a decline in trading volume. As a result, the exits strengthened the perception that the city state is losing its appeal as a listing destination.
Loh Boon Chye, chief executive of SGX, said the situation is less severe if one compares the total funds raised versus the value of companies that left. Last year, the exchange raised 13.2 billion Singapore dollars ($9.5 billion) through IPOs, reverse takeovers, secondary listings, rights issues and placements; while it lost 13.4 billion Singapore dollars ($9.6 billion) from delistings.
"One can focus purely on the number of listings versus the number of delistings... I think it's important to look at funds raised as an additional parameter," Loh said at the exchange's earnings briefing last Thursday evening.
Prominent Singapore businesses were among the 30 companies that left the SGX last year, including shipping firm Neptune Orient Lines and public transport operator SMRT Corp, according to data compiled by CNBC. That outnumbered the 16 IPOs in the same year.
Reasons cited by the companies were wide-ranging: from wanting greater management control to high costs of staying public and poor financial performance. For those who chose to turn private, Barry Lee, KPMG Singapore's head of capital markets group, said the lackluster economy played a part.
"Major considerations include the ability to attract the optimal valuation by being listed due to the generally subdued economic climate of recent years and the increased regulatory compliance burden and associated costs from a listing, such as listing fees and compliance requirements, director fees, professional fees," Lee told CNBC.
"Staying private also provides more flexibility for the management team to manage the growth of their business," he added.
But things could be looking up for SGX this year. Aside from the exchange's various efforts to boost confidence and trading liquidity bearing fruit, global IPO activity has also picked up, experts said.