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Gazprom's GDR listing on SGX may lead to secondary listing, say experts

Market-watchers say Gazprom's GDR listing could lead to a secondary listing here which could be good news for Singapore Exchange.

SINGAPORE: Gazprom, one of the biggest energy firms in the world, made history recently by being the first Russian company to list global depositary receipts (GDR) on the Singapore bourse.

Prior to that, GDRs in Singapore have largely been issued by Indian and South Korean companies.

Market-watchers say the GDR listing could lead to a secondary listing here which could be good news for Singapore Exchange.

Under Gazprom’s listing, there was no placement of new shares, although GDRs representing up to eight billion shares were on offer. They are not for the retail investor -- but only for qualified investors who are able to fork out at least S$200,000 for one lot.

"You have the opportunity or the chance to actually buy the shares here,” said Ng Kian Teck, lead analyst at Voyage Research.

“But because (of) the nature of GDR, it's more for high net worth investors, and because it is more illiquid, I think the volume and the impact on the local market will be quite limited."

On Gazprom's part, it is not just seeking greater access to Asian investors. The GDR listing follows a US$400 billion gas supply deal inked with China in May.

The Russian energy firm has said that it sees Asia Pacific as a key new market to supply gas to -- in light of cooling relations with the West over the situation in Ukraine.

For Singapore Exchange, it says it is looking forward to being both a capital-raising and business platform for Russian companies expanding their business into Asia.

"It probably gives SGX more reputational exposure, to be able to attract some of the biggest names in the world,” said Jack Wang, partner of Lexico Advisory.

“In terms of real financial numbers, I don't imagine there will be a real, huge material on its earnings or the financials going forward, because GDR is a pretty low cost of access to capital. So unless the company goes for a listing, I'd imagine that the impact will not be huge."

Analysts say the GDR listing, also known as an introductory listing, could lead to a secondary listing. This, could provide a much-needed boost for the Singapore market which has been seeing thinner trading volumes of late.

On top of that, the IPO (initial public offering) market has shrank 72 per cent on-year in the first half of 2014. According to data released by Thomson Reuters on Monday, companies raised US$773.6 million on the Singapore Exchange during the first six months of the year. 

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