Singapore’s 2017 IPO activity to surpass that of 2016: PwC

Singapore’s 2017 IPO activity to surpass that of 2016: PwC

Samantha Chiew
03/07/17, 12:46 pm

SINGAPORE (July 3): The volume of IPO funds raised by end-2017 is expected to surpass 2016 levels with professional services leading the way as the sector with the most funds raised, according to PricewaterhouseCoopers (PwC) Singapore.  

Based on recent data from PwC’s Equity Capital Markets Watch: Singapore H1 2017 report, initial public offerings (IPOs) in Singapore have raised US$329 million ($452.5 million) in the first half of 2017 alone.  

Two professional services IPOs HRnetGroup and shopper360 have notably raised US$132 million combined, which is significantly higher compared to the total of US$26 million registered the year before.

(See: HRnetGroup says public offering 68.3 times subscribed by retail investors)

(See: shopper360 raises $11 mil through IPO placement, to commence trading on Friday)

In particular, Real Estate Industrial Trusts (REITs) and business trusts – a traditional strength of Singapore Exchange (SGX) – accounted for 33% of Singapore’s IPO proceeds.

Together, they account for 82% of follow-on (FO) performance in Singapore for 1H17. Almost 80% are deploying FO funds raised to acquire properties, while 20% will fund their loans and borrowings repayment.

As such, PwC reckons Singapore will remain “the choice listing destination for REITs and business trusts”, with notable interest from Chinese-based real estate players.

The anticipated listing of NetLink Trust of up to US$1.6 billion is also expected to contribute to the sector’s growth and build momentum for the rest of the year, says PwC.

(See: NetLink Trust IPO one step closer to reality; Singtel receives SGX eligibility-to-list letter)

While the firm thinks the rising consumer and professional services sector is set to maintain Singapore’s position as one of the region’s main business and financial services centres, it believes the technology and medical technology industries will also boost this growth, following the signing of a series of memorandums of understanding (MoUs) with key players in the technology and start-up ecosystem.

It also highlights IHH Healthcare as one of the world’s largest healthcare groups and one that makes the healthcare sector among the more well-developed ones in Singapore, an attractive market trading valuation and price-earnings ratio ranging from 30-40 times.

According to PwC, the public consultation for dual class shares ending this year could contribute to making Singapore a more attractive listing location in Asia – although it is important to note that the Stock Exchange of Hong Kong (HKEx) plans to introduce a third board with dual class shares, which will likely bring competition between the two bourses to see which is faster to the market.

Says Tham Tuck Seng, Capital Markets Leader at PwC Singapore: “Singapore’s H1 2017 numbers suggest that, apart from REITs and business trusts, niche sectors in the consumer space and professional services will be the next big growth opportunity for the local exchange.”

“As SGX bolsters efforts in supporting technology start-ups, we can also expect to see more issuances from technology-driven activities,” he adds.

As of 12.44pm, shares of SGX are trading 2 cents higher at $7.36.

Right timing: STI’s upclimb supported by momentum and moving averages

SINGAPORE (Apr 20): There has been little change in the trend and chart pattern of the Straits Times Index. The index has been on a very glacial ascent towards 3,420, the target indicated when the index broke out of resistance at 3,190 in mid-Jan. Quarterly momentum eased during the past four trading sessions. The 100- and 200-day moving averages have turned positive. This coupled with positively placed DIs and rising ADX should continue to underpin the STI. The only cautionary signals are the somewhat overbought levels of short term stochastics and 21-day RSI, and stagnant vol....

SMI takes legal action against Hyflux; Maybank moves on Tuaspring

(Apr 20): SM Investments (SMI) has terminated its rescue agreement with Hyflux, it announced on Friday. Hyflux, on its part, had already on April 4 terminated the same agreement with SMI. SMI claims it has thus far abided by the agreement. “To clarify, SMI does not accept the purported termination of the Restructuring Agreement by Hyflux on 4 April 2019. This is because the termination was not in accordance with the terms of the Restructuring Agreement," said SMI. Under the agreement reached last October, SMI, led by Indonesian tycoon Anthoni Salim, was to have invested $530 million in....

CCT reports 3.8% higher 1Q DPU of 2.20 cents on higher property contributions

SINGAPORE (April 19): The manager of CapitaLand Commercial Trust (CCT) has reported a 1Q19 distribution per unit (DPU) of 2.20 cents, rising 3.8% y-o-y from 2.12 cents due to higher contributions from Gallileo and Asia Square Tower 2. Gross revenue and net property income (NPI) for the quarter increased by 3.5% and 3.4% to $99.8 million and $79.8 million, respectively. This comes after booking contributions from Gallileo – an office building in Frankfurt, Germany which the trust acquired a 94.9% stake in during June 2018 – as well as higher occupancy at Asia Square Tower 2, both of w....