Singapore's neighbours catching up in IPO leader board

Listings in rival bourses in S-E Asia gaining pace, with Thailand the market cap leader


Singapore is on track to keep the top spot as the leading South-east Asian listings market for the second straight year, but rivals are closing in.

More than $4 billion will have been raised here by the end of the year, according to Deloitte South-east Asia yesterday.

Around $3.66 billion has already been clocked up and November continues to be a busy month.

RE&S Holdings listed on the Catalist board on Wednesday, MindChamps debuts today and No Signboard commences trading on Nov 30. And Cromwell European Reit lodged a revamped prospectus on Wednesday after aborting a first IPO attempt.

But the momentum for initial public offerings (IPOs) elsewhere in the Asean neighbourhood is gaining pace, with rival stock markets like Thailand and Malaysia becoming more attractive.

Dr Ernest Kan, deputy managing partner for markets at Deloitte South-east Asia, said: "Other countries in South-east Asia are getting more exciting. Five, eight years ago, I wouldn't even talk much about them but in the last two, three years, other countries... have been catching up."

In fact, Thailand is the clear leader with regard to the size of companies that sought listings from 2014 to this year. IPOs in Thailand have added a combined market cap of $11.5 billion to the Thai bourse so far this year. By contrast, the total market cap of Singapore companies that went public from the start of the year until Nov 15 is about $6.56 billion, said Deloitte.

And while the funds raised through IPOs here this year have jumped from $2.26 billion last year to $3.66 billion as at Nov 15, NetLink NBN Trust's IPO accounted for a whopping $2.3 billion of that.

Malaysia's IPOs have raised $2.35 billion so far this year - six times what was raised last year - but that figure was likewise boosted by the blockbuster listing of petrochemical producer Lotte Chemical Titan.

Thailand, on the other hand, consistently raises at least $2 billion through IPOs every year, with $2.34 billion racked up so far this year. A big part of that - $1.34 billion to be exact - has come from the energy and resources sector. Thailand is rich in natural resources such as coal, noted Dr Kan.

Moreover, the Thai government has pledged to increase the use of renewable energy by fivefold by 2036, he said. The amount raised by this sector has also grown steadily over the past four years.

Thailand's Reit segment is gaining ground too. Over the past four years, real estate investment trust IPOs in South-east Asia have raised a combined $7.1 billion. Singapore-listed Reits accounted for $4.4 billion, those in Thailand accounted for $2.5 billion and Malaysia for $154.9 million.

Indonesia has consistently raised $1 billion a year in IPOs for the past four years, and has reached $1.04 billion so far this year.

Vietnam has a high IPO count, with many names coming from the consumer business and industrial products segments, but these firms also tend to be smaller in size.

In Singapore, the appetite for IPOs has also returned in a big way.

Ten of the 15 IPOs here in the year to Nov 15 offered a public tranche, whereas only eight of the 16 companies that debuted last year did the same. This year's IPOs were over-subscribed at a median of 31.8 times, versus a median of seven times last year. As well, the 10 Catalist listings so far this year had a median IPO price-to-earnings ratio of 11.3 times, versus 9.6 times last year.

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A version of this article appeared in the print edition of The Straits Times on November 24, 2017, with the headline Singapore's neighbours catching up in IPO leader board. Subscribe