Singapore exchange to list RMB equities

Singapore Exchange Ltd plans to list renminbi-denominated equities this year, followed by more Chinese currency financial products in 2014, in the hope of building itself into an international RMB offshore hub, the company's CEO said on Wednesday.

Magnus Bocker said trading in renminbi fixed-income products and foreign exchange-related products will be launched next year, and that Singapore would benefit "from the world's increasing interest in the currency" and the growing trade being settled in it.

Singapore has become the second-largest deposit center for offshore renminbi, on the heels of Hong Kong.

"We will continue to reach out to Chinese companies, particularly State-owned enterprises, using our exchange as a platform for accessing global capital and investors," said Bocker.

Based on last year's figures, Bocker added that the liquidity or turnover rate of Chinese enterprise shares already listed in Singapore - also know as the S-chips - was 50 percent better than traditional local and other overseas companies.

"It means Chinese companies are more attractive to investors."

Bocker also revealed that there is an increasing pipeline of Chinese enterprises waiting to apply for initial public offerings on the Singapore Exchange compared with a year ago, but he declined to give exact figures.

In 2012, the IPO price of Chinese companies in Singapore was boosted by around 24 percent, compared with the rise of 13 percent on Shanghai Stock Exchange and 17 percent on Shenzhen Stock Exchange, he added.

Last year, the China Securities Regulatory Commission lowered the threshold for enterprises hoping to launch IPOs overseas, to encourage more foreign capital into the industrial economy.

Currently, 614 companies are waiting to launch IPOs in the mainland stock market, after the CSRC suspended approvals in September.

Analysts have said that the current shortage in investment money may drive more Chinese companies to raise much-needed cash overseas.

"More Chinese enterprises are preparing for issuing bonds to raise funds, besides those stock listing. And 107 bonds were issued in Singapore Exchange, raising about $50 billion in the first three months," said Bocker.

So far, Singapore Exchange has listed shares for 140 Chinese companies with a market value of 230 billion yuan ($37.1 billion).

It has also launched the trading of 150 Chinese corporate bonds, mostly denominated in dollars, which have raised about 370 billion yuan. It has listed 60 renminbi-based bonds amounting to 84 billion yuan.

Singapore became the first financial center outside China to have a renminbi clearing bank on April 2, when the Industrial and Commercial Bank of China started clearing offshore renminbi-denominated trade in the republic.

Singapore Exchange and China Financial Futures Exchange, or CFFEX, signed a memorandum of understanding on Wednesday to cooperate in the derivative markets in both countries.

"Our strategic goal is to establish a world class exchange, which can draw from overseas markets and cooperate closely with our international peers," said Rong Zhiping, the deputy CEO of CFFEX.

Under the agreement, the exchanges will jointly explore areas including product and market development, information sharing and human resources training.

Bocker said that it was a new opportunity to improve the Asian derivatives market and satisfy the diverse needs of global customers.

By the end of 2012, there were 772 companies listed on Singapore Exchange, 40 percent of which are from outside the country. It opened a representative office in Beijing in 2008.

Singapore Exchange now ranks as the world's seventh-largest listed exchange, with a market capital of $6.7 billion.

In 2012, the company achieved total revenue of 3.3 billion yuan, the second-largest in Asia. Its net profit was $241 million last year.

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