SGX in 10th spot globally by IPO proceeds for Q2: EY

The Singapore Exchange centre in Shenton Way.
The Singapore Exchange centre in Shenton Way.PHOTO: ST FILE

SINGAPORE - The Singapore Exchange (SGX) took 10th place among global exchanges by initial public offering (IPO) proceeds for the second quarter of this year due to two sizeable real estate investment trust (Reit) IPOs, according to research by global professional services firm EY.

The two Reit IPOs were Eagle Hospitality Trust, which raised gross proceeds of US$565.8 million (S$766.6 million), and ARA US Hospitality Trust, which raised US$498 million.

In Asean, there was a "notable increase" in deal numbers at 29 IPOs, 53 per cent higher than the first quarter. There was also a significant boost in proceeds at US$1.7 billion, suggesting some signs of market recovery, EY said on Thursday (June 27).

In Asean, SGX was the top bourse by IPO proceeds. In the year to date, it accounted for 61 per cent of IPO proceeds in the region. In terms of deal numbers, SGX accounted for 17 per cent in Asean, while the Indonesia Stock Exchange saw the highest number of deals, accounting for 35 per cent of deal volume.

Year to date, Asean exchanges saw a total of 48 IPOs, 8 per cent lower in deal volume. The region also saw a 55 per cent drop in proceeds to US$2.0 billion compared with the first half of 2018.

For the Asia-Pacific region, IPO activity fell 12 per cent by volume to 266 IPOs for the year to date, and 27 per cent by proceeds to US$22.3 billion, compared with a year ago.

That being said, Asia-Pacific continued to dominate global IPO activity year to date, representing six of the top 10 exchanges by volume. In terms of proceeds, Asia-Pacific accounted for three of the top 10 exchanges.

China saw 27 per cent more IPOs at 33 in the second quarter compared with a year ago, but saw a 38 per cent drop in funds raised to US$5.1 billion from a lack of mega IPOs.

Japan's IPO market "remained stable" in the year to date, with a slight increase in deal numbers from a year ago, standing at 41 IPOs. This is compared with 39 IPOs in the same period a year ago. However, proceeds were "notably lower" at US$1.3 billion, from US$2.8 billion a year ago.

The global IPO market, however, is showing "continued signs" of slowdown despite the entry of unicorn IPOs, according to EY. Deal numbers were down 28 per cent from a year ago to 507 IPOs, which raised total proceeds of US$71.9 billion.

Technology, healthcare and industrial sectors saw the largest share of IPOs in H1 2019, accounting for 266 IPOs or 52 per cent of deal numbers. These sectors also raised US$47.8 billion or 66 per cent of global proceeds.

EY Global and EY EMEIA IPO leader Martin Steinbach said the global IPO activity slowdown continued following an "unusually quiet" Q1 2019 as ongoing geopolitical tensions, trade issues among the US, China and the European Union, Brexit and the outcome of European elections dampened IPO sentiment.