Singapore draws largest share of IPO funds in S-E Asia

Singapore Exchange Ltd. (SGX) signage is displayed outside the SGX Centre.
Singapore Exchange Ltd. (SGX) signage is displayed outside the SGX Centre.PHOTO: ST FILE

The Singapore Exchange (SGX) has topped its South-east Asian peers in attracting new listings so far this year, led by three large Reit listings.

The market is likely to stay healthy next year with more property sector deals expected, analysts say.

About $2.3 billion of initial public offering (IPO) proceeds had been raised across 16 deals on the SGX this year as of yesterday, nearly a fourfold increase from the $512.4 million raised from 13 deals last year, Deloitte revealed yesterday in its annual IPO review.

This put Singapore in the No. 1 spot for IPOs in South-east Asia this year. Indonesia mustered 14 deals raising about $1.1 billion in total, Malaysia hosted 10 IPOs with $285 million in proceeds, while Thailand saw 22 deals worth $1.7 billion.

All of South-east Asia has recorded 101 deals so far this year, raising $6.2 billion in the process. Last year, the region raised $5.9 billion from 154 deals.

Bumper deals in the real estate investment trust (Reit) sector were again the main driver for Singapore, with three deals - Manulife US Reit, Frasers Logistics and Industrial Trust, and EC World Reit - raising some $1.9 billion at the SGX.

"These three IPOs combined to account for over 80 per cent of the total market proceeds... The SGX has consistently been able to attract at least one Reit deal a year due partly to the favourable tax regime," Deloitte Singapore deputy managing partner for markets Ernest Kan told The Straits Times.

He was referring to measures such as income tax and goods and services tax concessions for Reits listed here. The accommodative rules underline the Government's aim to build an Asian Reit hub here.

"I expect Singapore to remain an attractive destination for Reit listings in 2017, which should sustain the overall IPO performance here."

However, global uncertainties such as Mr Donald Trump's election as United States president, the progress of Brexit, and further interest rate hikes by the Federal Reserve may prove disruptive, he said.

Meanwhile, the new listing pipeline in Singapore has been constantly scrutinised by market watchers who compared Singapore with financial centres such as Hong Kong, which has welcomed 314 IPOs and $89.5 billion in combined proceeds since 2014. Australia notched up 248 deals and $35.4 billion in proceeds. Over the same period, Singapore listings raised just $6.2 billion, behind Thailand's $6.3 billion.

SGX chief executive Loh Boon Chye, and equities and fixed income head Chew Sutat have stressed that the bourse will focus on attracting companies in core sectors such as Reits, healthcare and technology.

The most recent IPO, HC Surgical Specialists which was listed on the Catalist board on Nov 3, is in the healthcare sector. This was one of the 11 Catalist listings this year.

"The SGX has also been able to attract around 10 Catalist listings every year. This shows it's functioning properly as a fund-raising platform for local small and medium-sized enterprises," Dr Kan noted.

A version of this article appeared in the print edition of The Straits Times on November 22, 2016, with the headline 'Singapore draws largest share of IPO funds in S-E Asia'. Subscribe