- POSTED: 05 Oct 2013 00:37
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SGX has been attracting a steady flow of new listings from the oil and gas exploration sector. This following a review of SGX listing rules to make it more attractive for such companies to float their shares here.
SINGAPORE: The Singapore Exchange (SGX) has been attracting a steady flow of new listings from the oil and gas exploration sector.
This following a review of SGX listing rules to make it more attractive for such companies to float their shares here.
The move has helped boost overall market liquidity.
According to SGX data, total market capitalisation of these companies has quadrupled to S$3.6 billion from last year.
There are now seven Singapore-listed companies dealing in oil and gas exploration and production.
According to SGX My Gateway, KrisEnergy, RH Petrogas, Mirach Energy, Ramba Energy and Interra Resources are mainboard-listed, while Rex International and Loyz Energy are Catalist stocks.
SGX is looking to woo more of such firms going forward.
To allow mineral, oil and gas firms to tap on Asia's vast pool of liquidity within the SGX, the exchange announced new admission rules for such firms, which came into effect last week.
Mineral, oil and gas firms yet to be profitable can now list, but market capitalisation must be over S$300 million.
Plans to progress to production stage must also be disclosed.
Siri Wennevik, director of Wikborg Rein, said: "That gives those companies an opportunity to have a broader shareholder base, and also a commercial environment for the energy sector.
"That has cemented Singapore's position to get finance. Singapore provides the corporate structure and set-up for global companies to fulfil their needs."
The latest to be attracted to Singapore's capital market is Linc Energy.
On Wednesday, the Australian upstream oil and gas company announced plans to delist from the Australian market and make a new home in the Singapore Exchange.
Analysts in research firms like DMG Research have upgraded the oil and gas service sector to overweight, from neutral.
Jason Saw, research head (regional offshore and marine) at DMG & Partners, said: "I think clients are very picky right now. Our preference is for clients to stay with large rather than with small caps.
"If you talk about one, two years ago, in the small mid cap space, we do see stocks with 50 per cent to 100 per cent upside. Not in today's market. The big caps are having a better outlook over the 12 months, which is why we favour large caps right now."
DMG Research has also forecast Singapore rig builders to outperform earnings expectations next year, on top of recovering shipbuilding orders.