Singapore is attracting Chinese firms seeking to expand their businesses across Southeast Asia, driven by ongoing trade tensions with the United States and a strategic move to diversify beyond traditional markets. At least five companies – including a Chinese energy firm, a healthcare group, and a Shanghai-based biotech group – are currently exploring initial public offerings (IPOs), dual listings, or share placements on the Singapore Exchange (SGX) within the next 12 to 18 months. These plans represent a significant boost for SGX, which has struggled to attract large-scale listings despite its popularity for yield-oriented investments like real estate investment trusts. In 2024, SGX recorded just four new company listings, a stark contrast to its regional rival, Hong Kong Exchanges and Clearing Ltd., which saw 71 new listings. This shift reflects a broader trend, with Chinese companies increasingly recognizing Singapore as a vital gateway for trade and business activities with the rest of the world.

Jason Saw, head of investment banking at CGS International Securities, emphasized that Singapore’s strategic location and geopolitical neutrality make it an attractive destination for Chinese companies seeking to establish a global presence. The trade war between the U.S. and China, marked by escalating tariffs – 145% on Chinese imports and 125% on U.S. goods – initially spurred this interest. While a 90-day pause was agreed upon, uncertainty remains due to the temporary nature of the agreement and the potential for continued policy shifts from the Trump administration. Following Trump’s trade actions, inquiries about listings on SGX surged, highlighting the direct impact of geopolitical events on investment decisions. CGS International Securities is currently advising at least two Chinese companies on their plans to list on the SGX, with potential primary listings raising around $100 million. Despite Singapore’s attractiveness, Hong Kong remains the preferred offshore market for many Chinese companies, largely due to Beijing’s support and a more familiar investor base.

However, Singapore’s recent initiatives – including a 20% tax rebate for primary listings and promises of further measures – are intended to stimulate interest in its equity market. These efforts, coupled with Singapore’s political stability and neutral stance, are seen as appealing factors for companies seeking a stable and predictable environment. Despite these efforts, closing the gap with Hong Kong in terms of equity listings is expected to be a long-term challenge, largely due to Singapore’s more conservative investor profile and stricter listing requirements. One Singapore-based multinational software company’s managing director noted, "You need to make it easier for companies, especially technology companies, to list." He added that with most startups in the region headquartered in Singapore, it represents the ideal location for their initial public offerings. The ongoing geopolitical landscape and China’s strategic focus on Southeast Asia suggest that Singapore’s role as a key gateway will likely continue to grow, driving further interest in its equity market and offering opportunities for Chinese companies to expand their global reach.

Singapore's commitment to fostering a business-friendly environment, combined with its strategic location and political stability, positions it as a compelling destination for Chinese companies seeking to capitalize on emerging market opportunities and navigate the complexities of the global trade environment. Ultimately, Singapore’s success in attracting these listings hinges on its ability to adapt to the evolving needs of Chinese companies and maintain its competitive edge in a dynamic and increasingly volatile global market.