Asia's corporate listings mushrooming, says report
Asia's corporate listings mushrooming, says report
SINGAPORE (AFP): Corporate listings in eight core Asian markets are expanding rapidly on a growing investor base and the number of listed companies will reach up to 5,000 by the turn of the century, a report released here said.
Hong Kong, Singapore, Malaysia, Thailand, Indonesia, the Philippines, South Korea and Taiwan together had 3,129 listed companies as in June 1995, said the report by Salomon Brothers Singapore Pte. Ltd.
Between 1989 and 1994, the number of listed companies in the region increased 63 percent from 1,868 to 3,052. The growth rate in the previous five-year period was 39 percent.
Thailand and Indonesia had the most explosive growth in listings over the last five years -- 122 percent and 284 percent respectively -- with Hong Kong, Singapore, Malaysia and Taiwan also recording sharp increases.
"Investors now have more choices both within and across markets than they had five years ago, and this is a trend that is likely to continue," said Salomon Brothers.
"Even if the pace of new listings slows to more normal growth rates that are in line with medium-term rates of gross domestic product growth, these eight markets could have in the range of 4,500-5,000 listed companies by the year 2000," the investment house said.
The proliferation of corporate listings was attributed to the expansion of the investor base resulting from growth in regional savings levels and per-capita incomes.
Also contributing were growing international interest in investing in Asia, regulatory and structural changes which aided the computerization of trading, improved settlement systems and higher standards of disclosure, the report said.
The number of public companies in the region rose by 10 percent last year and by a further three percent in the first half of 1995, to 3,129.
Indonesia
Indonesia set the pace in 1994 with a 27 percent increase, with Hong Kong, Singapore, Malaysia and Thailand posting "low to mid-teen rates of growth," the Salomon Brothers report said.
"The key observation regarding these statistics is that number of listings expanded during one of the worst years for the markets in the last decade, which in turn underscores the strength of the underlying trend toward broader and deeper capital markets in the region," it said.
South Korea remains the largest market, with more than 700 listed companies, but its relative importance over the past five years has slipped from more than one-third to less than one- quarter of the regional total, the report said.
Indonesia, Thailand and Malaysia all increased their relative positions by more than three percent while Hong Kong, Singapore and Taiwan had smaller increases of less than one percent.
"In effect, the regional pie in terms of listed companies is now more evenly divided than it was five years ago," Salomon Brothers said.
The expansion of corporate listings could lead to structural market changes, the investment house said.
Companies would have to compete harder for recognition and funding and in turn markets could be forced to become more efficient in terms of transactions, financial reporting and pricing, it added.