Empirical evidence of benefits associated with overseas listings : Chinese companies listed in Singapore Stock Exchange

• Main Authors: Apolinar, Christened Rikki Suarez, Toh, Shu Wen, Lim, Wei Liang
• Other Authors: Liu Wei-Lin
• Format: Final Year Project
• Language: English
• Published: 2010
• Subjects: DRNTU::Business::Finance::Stock exchanges
• Online Access: http://hdl.handle.net/10356/35503
• Institution: Nanyang Technological University

This report compares financial performance of Chinese-domiciled companies listed in China against those listed in Singapore. Empirical evidence is used to quantify the benefits and determine if the benefits in foreign listing exceeds that of local listing. Literature findings suggest that there should be measurable benefits for companies domiciled in China to list in the Singapore Exchange as compared to Chinese Exchanges. Empirical results prove that ROA and ROE is higher, and stock-returns is lower for Chinese-domiciled companies listed in Singapore Exchange in comparison to those listed in Chinese Exchanges. It is worth noting that the lower stock-return does not benefit investors but it is beneficial for companies. The benefits of low stock returns is explained by the cost of capital effect and agency cost. This paper shows that there are benefits for Chinese domiciled companies to list in Singapore as compared to listing in China.