Singapore, which has found its status as Asia's chief financial hub under threat from a resurgent Hong Kong, thanks to huge Chinese initial public offerings (IPOs), is busy enlisting Indian corporates' support in its fight with the rival Chinese city.

As part of its larger plan to emerge as the chief source of capital for the region's fast growing firms, it has simplified the norms for foreign companies looking to raise capital from the Singaporean and global investors.

"Besides simplifying the procedure for foreign companies looking for full-fledged secondary listing in Singapore, we have opened up a new way for listed companies to raise money from the global markets," said Tan Suan Hui, assistant vice-president of the Singapore Exchange (SGX), who is in India to spread awareness about the changes among the companies here.

SGX, she pointed out, has done away with all the extra paperwork for companies looking to raise money from institutional and high net worth (certified) investors in Singapore.

"Through the new method based on the global depository receipt (GDR) facility, all companies listed in countries including India become automatically eligible for issuing their own receipts which can then be traded on the exchange in lieu of shares," she pointed out.

Under the new system, SGX will not demand any extra level of disclosure than are already made by the companies under Indian regulations.

"What we realised was that the disclosure requirements in some countries, including India, are strict enough to let institutional investors have a good idea of the financial health of the company," Hui pointed out.

The new facility has been designed for Indian companies eager to tap global institutional investors, rather than the Singaporean retail investor.

According to the exchange, local funds such as Temasek and local branches of global biggies such as Fidelity and Templeton manage an eye-popping US $450 billion (Rs 20 lakh crore) of assets, against just around Rs 1 lakh worth of equity assets held by all the mutual funds in India together.

The Singapore Exchange, home to the Straits Times Index, has also been seeing increasing foreign presence with nearly 250 out of the nearly 700 listed companies incorporated outside the city-state.

"In fact, of the $2.6 billion (Rs 11,700 crore) raised by companies from Singapore's equity market during the first half of this year, nearly 82 per cent was raised by non-Singapore based companies," Hui pointed out.

Against this, Indian companies are estimated to have raised a little more than $0.6 billion during the whole of last financial year through depository receipts listed on the American and European exchanges.

"We are offering Singapore as a more value for money destination for raising capital as professional costs associated with a GDR issue will be at least around 30 per cent cheaper than Europe or the US. Besides, the Singapore market is accessible on a equal footing to any institutional investor anywhere in the world, thus making sure that the class of institutional investors remain the same," pointed out Tan Tee Yong, senior associate with the Singapore Exchange.

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