COMPETITION FOR OVERSEAS LISTINGS: SINGAPORE VERSUS HONG KONG

Abstract

This paper analyzes the initial listing decisions of overseas listings, the Chinese IPOs, that qualify for both Singapore and Hong Kong Stock Exchange listing. Using a sample of Chinese IPOs from 2000 to 2006, this paper examines the initial listing decisions of firms for which SGX listing was actually a consideration. Several potential factors that affect the initial listing decision are analyzed. These include the size of IPOs, peer-firms listings, firms’ age and listing requirements, etc. Using a model that controls for selectivity bias, the results suggest that smaller and riskier Chinese firms tend to list on SGX, this is consistent with the lower listing requirements of SGX that lowers the barrier of entry for the Chinese firms to list in Singapore. Firms are also more likely to list on the exchange where their industry peers are listed. Firms* age has shown to have no effect in influencing the initial listing decisions. This paper is also provides a preliminary research for the real estate industry by considering the implications of overseas listing of real estate stocks and real estate investment trusts (REITs) in the Asian stock markets.