Singapore-based companies raise $1.4b on stock markets

A poster of the HRnetGroup's initial public offering. The recruitment firm's offering early this month was the largest Singapore IPO for the first half of this year, raising US$126.4 million (S$175 million).
A poster of the HRnetGroup's initial public offering. The recruitment firm's offering early this month was the largest Singapore IPO for the first half of this year, raising US$126.4 million (S$175 million).ST PHOTO: DAVE LIM

First-half figure is down 62% year on year, but IPO activity is expected to pick up

Singapore-based firms raised 62.3 per cent less on stock markets in the first half of the year compared with a year earlier - though things are set to get better later this year.

Most proceeds came from follow-on offerings such as rights issues of new shares. Initial public offering (IPO) proceeds fell significantly year on year.

While US$1 billion (S$1.4 billion) has been raised by Singapore-domiciled companies so far this year, this pales in comparison to the first half of last year, when about US$2.8 billion was raised.

The fall came in spite of a slight increase in the number of equity capital market issuances from 22 to 23.

Follow-on offerings accounted for the lion's share - 76.8 per cent of proceeds raised. IPOs made up only 23.2 per cent of proceeds.

Singapore companies issued eight IPOs in domestic and overseas stock markets for the year to date, raising US$243 million in proceeds. This was an 89.8 per cent plunge from proceeds raised in the first half of last year.

Recruitment firm HRnetGroup's offering was the largest Singapore IPO for the first half of this year, raising US$126.4 million (S$175 million).

Real estate companies dominated the headline market issuances. Of the five largest issuances, three were in the real estate sector, and were follow-on offerings. These were Ascott Residence Trust, which accrued US$316.9 million; OUE Commercial Real Estate Investment Trust, which took in US$105.8 million; and Manulife US Real Estate Investment Trust, which raised US$80.5 million.

Activity from the real estate sector made up 60.4 per cent of the total activity, generating proceeds worth US$633.2 million.

DBS was the top underwriter with US$308.1 million of equity proceeds from four deals, while BNP Paribas took second place, with US$158.5 million in proceeds from one deal. However, DBS' total fees fell 51.9 per cent to US$3.1 million, while BNP Paribas saw its fees rise 178.3 per cent to US$2.1 million.

UOB came in as the third-ranked underwriter, with US$113.9 million in proceeds in seven deals. Its fees nearly doubled to US$2.9 million.

As a whole, the industry saw its fees fall by 18.1 per cent from last year to US$23.5 million.

Singapore-listed equity offerings, including both IPOs and follow-on offerings, totalled US$986.6 million in proceeds for the year to date, down 45.5 per cent from a year earlier. IPO listings in Singapore stock exchanges pulled in US$300.3 million, down 75.6 per cent.

However, a pipeline of deals is expected to boost IPO activity this year, according to Thomson Reuters, which compiled the data.

NetLink Trust, a subsidiary of SingTel, is expected to launch its hotly anticipated IPO that could raise as much as US$2 billion, and Indonesia's Sinar Mas Group plans to launch its US$800 million business trust IPO later this year.

Correction note: This story has been edited to clarify that Manulife US Real Estate Investment Trust raised US$80.5 million.

A version of this article appeared in the print edition of The Straits Times on June 23, 2017, with the headline 'S'pore-based companies raise $1.4b on stock markets'. Print Edition | Subscribe