Singapore ranks fifth for IPO launches by foreign firms

Four such listings helped raise proceeds by over 400% to $3.8b this year, says report

ARA US Hospitality Trust launched one of the biggest IPOs on the Singapore Exchange mainboard this year. It has a total of 38 properties comprising Hyatt Place and Hyatt House hotels.
ARA US Hospitality Trust launched one of the biggest IPOs on the Singapore Exchange mainboard this year. It has a total of 38 properties comprising Hyatt Place and Hyatt House hotels.PHOTO: ARA US HOSPITALITY TRUST

Singapore's stock market ranked fifth globally among destinations chosen by foreign companies to launch initial public offerings (IPOs) this year, noted a new report.

The listing of four foreign companies helped boost IPO proceeds by more than 400 per cent to US$2.8 billion (S$3.8 billion) this year from last year, said Dealogic and consultancy EY.

The biggest IPOs on the Singapore Exchange (SGX) mainboard this year were two United States real estate investment trusts (Reits) - ARA US Hospitality Trust, the first American hospitality trust to list here, and Eagle Hospitality Trust. Together, they accounted for US$1.06 billion in proceeds.

Mr Max Loh, EY Asean IPO leader and managing partner, Singapore and Brunei, said: "Singapore's policy and market initiatives should prove fruitful in terms of improved IPO activity in 2020, particularly (for) Reits and business trusts."

There were 11 IPOs on the SGX this year, down about 27 per cent from last year. That placed Singapore behind Indonesia with 54 IPOs, Malaysia on 29 and Thailand at 27, according to EY.

South-east Asian exchanges posted a total of 126 IPOs this year, raising US$8 billion in proceeds - a 4 per cent increase in deal volume and a rise of 11 per cent in value over last year, the report said.

In the fourth quarter alone, regional exchanges held 39 IPOs, raising US$4.2 billion, compared with 38 listings with proceeds of US$1.9 billion in the third quarter.

There have been 1,115 IPOs globally this year with proceeds of US$198 billion - a 19 per cent fall in deal volume and a 4 per cent decrease in proceeds compared with last year, the report said.

  • 11

    Number of IPOs on the SGX this year, down 27 per cent from last year, putting Singapore behind Indonesia, Malaysia and Thailand.

"Geopolitical uncertainty and trade tensions heavily impacted the 2019 IPO landscape, pushing overall IPO activity down in terms of deals and proceeds," it noted.

However, the report added that as US-China-European Union trade tensions, and concerns about economic growth and other geopolitical issues - including Brexit and social unrest in Hong Kong - subside, a healthy increase in IPO activity is expected next year.

The first half of the year will likely be busier as markets are expected to become more volatile leading up to the US presidential elections.

Mr Paul Go, EY global IPO leader, said: "As we head into 2020, we anticipate that some of the geopolitical uncertainties and trade tensions that plagued the IPO market in 2019 will fade.

"Market volatility will remain, and owners with the ambition of a successful IPO in the near term will need to be prepared to take advantage of the windows of opportunity expected in the early part of 2020."

A version of this article appeared in the print edition of The Straits Times on December 17, 2019, with the headline 'S'pore ranks fifth for IPO launches by foreign firms'. Subscribe