SGX juices up IPO race with Israel tie-up

Singapore links up with the Tel Aviv Stock Exchange to facilitate technology and healthcare company listings and enhance its draw as a hub for next-generation company shares.

The Singapore Exchange (SGX) is stepping up its battle for next-generation company listings by entering into a strategic partnership with its counterpart in Israel, a well-known hub for technology startups and multinational research and development. 

Under the partnership announced on Monday, the Tel Aviv Stock Exchange (TASE) and SGX will join forces to support technology and healthcare companies in their efforts to raise capital. 

In practice, they will assist companies during the pre-listing stage, make the listing process easier, and provide issuers with post-listing support by leveraging both exchanges’ networks and platforms, the exchanges said

The two will also look at developing a private market eco-system in Israel and enhancing post-trade connectivity and services.

The tie-up with Tel Aviv could potentially increase the pipeline of initial public offerings on SGX, which has a track record for nurturing startups, and give it fresh impetus in its battle with rival Asian exchanges.

That's after Hong Kong snared its first Israeli listing last year. Sisram Medical, which develops laser devices for aesthetic treatment and was acquired by Fosun in 2013, listed in Hong Kong in September.  

Israel has the highest density of startups, venture capital investments, and the highest R&D spending per capita in the world. 

However, it may take years to see the full impact of the SGX-TASE tie-up since most of Israel's next-generation companies have yet to reach the point of needing large-scale public funding.
Israel Chemicals is the biggest Israeli company to list on a foreign stock exchange in recent years after it floated on Nasdaq in 2014. 


SGX’s move to connect with TASE comes shortly after it issued a consultation paper on accepting dual-class share structures, which could potentially persuade technology startups and early-stage healthcare companies to raise capital through IPOs in the Lion City rather than elsewhere.  

Singapore was the first major Asian financial market to propose the acceptance of dual-class shares but it has since fallen behind Hong Kong in terms of implementation. Hong Kong Exchanges & Clearing started accepting IPOs with different voting rights on April 30 and has already received two listing applications from smartphone maker Xiaomi and biotech firm Ascletis Pharma.

With the TASE tie-up, SGX now hopes to steal a march on its rival in the pursuit of Israeli startup listings by offering companies the potential to tap investors both home and abroad and optimise their valuations.

“The partnership agreement between TASE and SGX creates a unique value proposition for Israeli tech companies," Ittai Ben-Zeev, TASE’s chief executive, said in a prepared statement. "For the first time, Israeli companies will be able to raise funds on both markets simultaneously. Dual-listing or performing a simultaneous IPO on both exchanges can assist Israeli issuers in increasing liquidity and gaining attractive valuations from a broad Asian investor base while ensuring domestic demand."

Ride-sharing app Gett, which raised $300 million in a private funding round in 2016, is tipped as the biggest Israeli startup that may go public in the near future.

Other potential listing candidates include security management solutions provider Skybox Security, cyber security software developer CybeReason, and cloud storage company Infinidat.

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