SINGAPORE - The initial public offering (IPO) market in Singapore has not been spared from souring economic conditions that have hit most of the region so far in 2022.
Funds raised from the nine IPOs in Singapore in 2022 hit US$421 million (S$578 million), plunging from the US$1.2 billion raised from the eight IPOs in 2021, according to data from Deloitte.
The statistics for 2022 represent the period from Jan 1 to Nov 11.
There were also no real estate investment trust (Reit) listings in Singapore in 2022 – the first time this has happened since 2010.
This is notable because Singapore is seen as an important market for Reits, said Mr Darren Ng, disruptive events advisory deputy leader at Deloitte Singapore.
“A likelihood of why there were no listings this year is mainly because of the rising interest rates environment... Valuations have decreased, and increasing borrowing costs also pose as a challenge,” said Mr Ng, adding that those seeking a listing are probably taking a wait-and-see approach.
Overall, funds raised from IPOs in South-east Asia fell by about half in 2022, from US$13 billion to US$6 billion. There were 136 listings in 2022, against 152 in 2021.
Other countries in South-east Asia, except for Malaysia and Vietnam, are also seeing a similar dip in IPO proceeds.
Funds raised from IPOs in Malaysia rose from US$337 million in 2021 to US$681 million in 2022. Vietnam also saw an uptick, from US$16 million in 2021 to US$65 million in 2022.
Though Thailand and Indonesia saw a dip from 2021, they were still the strongest performers in 2022. Thailand raised US$2.5 billion in IPO proceeds, while Indonesia raised about US$2.3 billion.
The blockbuster listing went to Indonesian tech company GoTo, which raised US$1.1 billion, contributing to about half of the funds raised in the country. The start-up, a merger between ride-hailing provider Gojek and e-commerce firm Tokopedia, went public in April.
Despite the poorer performance in IPO markets in 2022, there will still be some bright spots in the year ahead, said the analysts.
Ms Tay Hwee Ling, disruptive events advisory leader at Deloitte South-east Asia and Singapore, said that while factors such as inflation rate and interest rate hikes have affected the economy, there were still some big listings in November.
Three of the top 15 IPOs in the region so far in 2022 went public in November.
She added: “Looking into next year, there is still a pipeline of sizeable IPOs that are waiting to time the market. Some of them have gone through the approval process.”
While the IPO market in Singapore has been relatively muted in 2022, the Republic’s political stability and smooth reopening of its borders will make it an attractive place for businesses.
The inflow of funds and how the country is attracting more head and family offices will also bring about more opportunities to Singapore’s capital markets, said Mr Ng.
