Singapore Exchange to allow dual-class shares to boost listings

By Anshuman Daga

SINGAPORE (Reuters) - Singapore Exchange Ltd (SGX) is to allow companies to list with dual-class shares, a move which aims to attract blockbuster tech listings and follows a similar action by its Hong Kong rival.

SGX's move is designed to make it the go-to-place for potential initial public offerings of Southeast Asian start-ups, such as ride-hailing services Grab and GO-JEK, and online retailers Tokopedia and India's Flipkart, analysts said.

It also fits with the Southeast Asian city-state's moves to provide funding and light-touch regulation, as it seeks to reinvent itself as a fintech and new technology hub.

SGX, currently a global listing hub for business trusts and real estate investment trusts, has been considering the introduction of dual-class shares for about a year.

In February 2017, a key Singapore advisory panel recommended introducing the dual-class share (DCS) structure as part of a plan to seek new growth drivers for Singapore. Last year, SGX kicked off a public consultation on dual-class shares.

"Singapore is making huge efforts to transition into the new economy and we are already recognised as the leading hub for start-ups," SGX CEO Loh Boon Chye said after the bourse reported its quarterly results on Friday. "Some of these companies may need a capital structure that supports a rapid scaling up of their business," he said referring to dual class shares. "The DCS is one way, not the only way. We expect to have our rules out end of this quarter and expect our first listing thereafter," Loh said.Dual-class shares typically give one set of shareholders greater voting rights than others. The structure is popular by owners of new technology companies, with the extra voting power given to top executives seen as protection against pressure for short-term returns.

But dual-class shares have also been criticised by corporate governance activists, who have warned that the structure could be abused by company insiders.

Hong Kong is also set to allow dual-class shares under rule changes to be proposed by Hong Kong Exchanges and Clearing (HKEX), the city's exchange operator which is raising the stakes in a battle against New York for blockbuster Chinese initial public offerings.

Earlier on Friday, SGX said it expected increased market activity and more listings after reporting a flat net profit for October-December. ($1 = 1.3190 Singapore dollars)

(Reporting by Anshuman Daga; Editing by Elaine Hardcastle and Jane Merriman)