Investment activities in Singapore amounted to US$443.1 million ($600.8 million) in the first nine months of the year, down 39.9% from the same period a year ago.

The slowdown follows the uncertainties from the Covid-19 health-turned-economic crisis, Financial market data provider Refinitiv reveals in its preliminary report on Singapore’s investment banking sector.

Of the funds, US$84.7 million was from advisory fees for completed mergers and acquisitions (M&As). This is 27.8% contraction from 2019 which saw strong M&A activity, particularly in the first nine months.

2020 has been a tough year for M&A activity with April seeing the lowest number of deals since June 2013 and may having the lowest monthly total since June 2019. Activity has improved in 3Q2020 with a 38% month-on-month increase. This is still a 7.5% year-on-year contraction from the performance in 3Q19.

Interestingly, Singapore’s domestic M&A activity hit an all-time high in the nine-month period to reach US$22.6 billion. On a year-on-year basis, it is 21.4% higher than domestic M&A activity registered in the first nine months of 2019.

Refinitiv attributes this to the US$7.998 billion proposed merger between CapitaLand Mall Trust and CapitaLand Commercial Trust, which marks the largest domestic Singaporean deal on record. This merger surpasses CapitaLand’s US$7.9 billion acquisition of Ascendas in 2019.

Inbound M&A activity – in which a foreign company merges with a Singapore-headquartered firm – hit US$19.1 billion, up 20.5% from the deals registered between Jan and Sep in 2019.

A major push came from the US$9.9 billion deal where Japanese firm Nippon Paint acquired the share capital of Nipsea, a Singapore-based manufacturer of coatings from Wuthelam Holdings.

As for outbound M&A deals – where a Singaporean company merges with a company abroad – volumes plunged 36.9% year-on-year to US$15.9 billion. This marks the lowest deal volume for the first 9-month period since 2015.

Across the M&A deals, US$21.6 billion, or 30.8% of the total deal volume came from the real estate sector. The materials sector followed suit with a 20.5% market share while industrials made up 15.7%.

Meanwhile, equity and equity-linked (ECM) issuances by Singapore companies hit US$4.9 billion – down 22% from the first nine months of last year. Follow-on offerings similarly fell 23.2% to hit US$3.1 billion in proceeds.

A substantial proportion or 43.2% came from the industrials sector due to the capital raisings from Singapore Airlines which was severely hit from the travel restrictions.

In this time, Initial Public Offerings (IPOs) by Singaporean companies dipped by 67.1% to US$681.1 million. The largest IPO for the year is Elite Commercial REIT, which stands at US$170.5 million.

Presently, DBS Group leads Singapore’s ECM underwriting rankings, with a 28.6% market share and US$1.4 billion in related proceeds. Goldman Sachs is a close second with a 23.2% market share, while Morgan Stanley taking third place with a 18.2% market share.

Over at debt capital markets, primary bond offerings from Singapore-domiciled issuers plunged 24.6% to raise US$19.5 billion between January and September. This is the lowest first nine-month performance since the US$15.2 billion offering in 2015.

Just like for ECM, DBS Group is leading Singapore bonds’ underwriting with US$4.45 billion in related proceeds and 22.8% market share. It is tailed by United Overseas Bank which has US$1.8 billion in related proceeds or 9.4% market share.

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