SGX sees slowing in number of IPOs for first half of year
SGX gets 7 IPOs in first 6 months of 2018 but total proceeds raised climbed 20%
Like most exchanges around the world, the Singapore Exchange (SGX) saw a slowing in the number of initial public offers (IPOs) made in the first half of the year, as rising geo-political tensions and trade risks dented confidence.
According to EY Asean and Singapore managing partner Max Loh, SGX attracted seven IPOs in the first six months of the year, down 30 per cent from the same period last year, when there were 10.
Total proceeds raised climbed 20 per cent to US$0.4 billion (S$0.55b), from US$0.3 billion, anchored mainly by the listing of Sasseur Reit, an operator of China outlet malls, which raised some US$305 million.
"The other IPOs were predominantly smaller cap listings with a couple of IPOs in the health care sector," Mr Loh said.
An SGX spokesman said: "We are very pleased that total funds raised through equity primary and secondary fundraising against a volatile market continued to be robust in Singapore, with funds raised growing more than four times in FY2018 compared with FY2017 (financial year ended June 30)."
Half of the new listings were cross border deals, with companies hailing from countries such as Germany, Korea, Myanmar, China and Malaysia.
The spokesman added that SGX's partnerships with Nasdaq, the Tel Aviv Stock Exchange and its recently announced dual-class share (DCS) structure also accelerated interest for a Singapore listing.
Underpinning SGX's optimism is also a 50 per cent increase in bond listings on the exchange this financial year, which it says reflects market demand for fund raising through both debt and equity.
Ms Tay Hwee Ling, Global IFRS & Offerings Services Leader at Deloitte Singapore, shared SGX's optimism for the rest of the year, and said there would be interest from domestic and cross border IPOs.
For EY's Mr Loh, optimism was tempered with caution. "Encouraging economic conditions, equity market valuations, continued low interest rates and continued investor and issuer appetite bode well for more robust IPO activity, but this could be somewhat weighed down by geo-political tensions, trade policy risks and emerging market concerns," he warned.
Experts said the adoption of SGX's DCS listing rules would accommodate the listing of more high growth companies in their quest to raise capital, while broadening investment options for investors and lending vibrancy to Singapore's capital market.
Mr Loh said: "This has to be a positive move in spurring new IPOs but it cannot be seen as a single silver bullet. There are many other factors that companies take into consideration in determining when and where to list."
Corporate strategy, valuation, a capital market capability, a market's liquidity as well as initial and ongoing costs are some other factors determining IPO destinations. - THE STRAITS TIMES
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