Asia-Pacific to remain most active region for new IPOs as Singapore retains hub status: EY

Singapore raised US$3.3 billion in proceeds - double the amount raised in 2016 - making the financial hub the most active IPO market in South-east Asia.
Singapore raised US$3.3 billion in proceeds - double the amount raised in 2016 - making the financial hub the most active IPO market in South-east Asia.Photo: ST FILE

SINGAPORE - The Asia-Pacific will remain the world's most active region for new listings in 2018, with Singapore retaining its status as a hub for Asean companies, EY said in a global report on initial public offerings (IPOs).

A total of 1,624 IPOs were registered in the year to date with US$188.8b raised, an increase of 49 per cent by number of deals and 40 per cent by proceeds compared to 2016, making it the most active year for new listings since 2007.

The number of deals in the Asia-Pacific region rose 44 per cent to 935 listings, although proceeds raised was largely flat, growing by just 0.2 per cent to US$73.2 billion (S$98.9 billion).

In South-east Asia, proceeds grew 76 per cent to US$9.9 billion, largely driven by Thailand, Indonesia and Singapore.

In terms of proceeds, the US$3.3 billion raised in Singapore - double the amount raised in 2016 - made the financial hub the most active IPO market in South-east Asia; Singapore ranked fifth in the Asia-Pacific by proceeds.

Homegrown NetLink NBN Trust's July listing played a large part in Singapore's ranking in 2017. The company's US$1.7 billion deal was the largest IPO in Asia-Pacific in the third quarter of 2017, and the second-largest globally at the time.

Investors are anticipating a very active 2018 globally for IPOs as markets return to their pre-crisis levels, EY said.

Martin Steinbach, EY Global and EY EMEIA IPO leader, said that 2018 would be an "exceptional" year for IPOs.

"The stronger-than-expected turnaround in economic activity in the eurozone has boosted expectations for global economic growth. All the major engines of growth in the global economy are now synchronised in an upward trajectory for the first time since the end of the global financial crisis," he said.

Asean real estate, consumer and technology companies will help to drive an increase in the number of IPOs globally in 2018, EY said.

Asia-Pacific will remain the world's most active region for new listings next year, said EY, citing strong economic growth in several countries, buoyant investor confidence, rising equity markets and a robust pipeline of companies ready to list.

Average IPO size will overall remain relatively low in 2018 compared with the historical average, but will see an increasing number of entrepreneurial businesses seeking public offerings, particularly in the technology sector, according to EY.

Ringo Choi, EY Asia-Pacific IPO leader, said the rapid growth in Asia Pacific's IPO numbers cemented the region as the world's most active for new listings.

"There was a thriving market in small-cap IPOs as far afield as mainland China, Japan and Australia. We expect to see this trend continuing into 2018, with IPOs expected to rise in Hong Kong, Japan and the Asean region," he added.

While Singapore is expected to remain a hub in Asean, Hong Kong is offering keen competition. Among Hong Kong's 149 public offerings in 2017, which raked in US$15.6 billion, 16 were Singapore-domiciled companies.

The Hong Kong stock exchange's strong progress in attracting small- and medium-sized companies is likely to continue on the back of high valuations and strong regional economic growth, EY said."In particular, it is showing success in turning itself into a listing hub for technology and other 'new economy' firms," EY said.