IPO funds raised on SGX fall to second lowest in 10 years

There were 870 IPO deals in the first nine months of this year, down from 1,081 in the same period last year.
There were 870 IPO deals in the first nine months of this year, down from 1,081 in the same period last year.PHOTO: ST FILE

This year has proved a bit of a dud for initial public offerings (IPOs) on the local share market, with one of the lowest total amounts raised in 10 years.

The 15 IPOs - three on the mainboard and 12 on the Catalist - raised about $730 million.

This is well down from last year, when $4.7 billion was raised from 20 IPOs, seven on the mainboard and 13 on the Catalist.

The figure is also the second lowest over the past 10 years.

The local numbers reflect the lacklustre IPO market around the world, which has felt the pinch from trade and geopolitical tensions.

There were 870 IPO deals in the first nine months of this year, down from 1,081 in the same period last year.

But while the number of global deals has fallen, total proceeds increased to US$160.6 billion (S$220 billion) in the first nine months of this year from US$141.4 billion last year.

PwC Singapore's capital markets leader, Mr Tham Tuck Seng, said: "Singapore's capital market activity is not spared from market volatility due to the openness of our economy and there are significant foreign funds under management here.

"But we still think that the IPO pipeline remains optimistic in 2019, given Singapore's pro-business environment."

More fund-raising activity is expected next year from real estate investment trusts, business trusts, healthcare companies, and food and beverage players.

PwC also anticipates that tech listings will make their presence felt next year.

Its report said: "With an array of strategic partnerships entered into by SGX (Singapore Exchange) to facilitate access to the market, and the change in listing rules to accommodate companies with dual-class share structures, we expect to see more local market activities in 2019."

There have been 24 voluntary delistings this year, the same as last year.

Mr Tham said if the SGX's proposed changes to rules on voluntary delisting resolutions and exit offers are adopted, voting power will shift from offerors and concert parties to minority and independent shareholders. This might result in better exit offers for minority and independent shareholders, which may make it more challenging for firms to undergo voluntary delisting.

The report found sizeable capital market activity in other Asean countries such as Thailand and Vietnam. Malaysia has staged 21 listings this year, raising US$200 million.

"This affirms our view that increased competition from regional bourses could be expected," PwC said.

A version of this article appeared in the print edition of The Straits Times on December 21, 2018, with the headline 'IPO funds raised on SGX fall to second lowest in 10 years'. Print Edition | Subscribe