Singapore's IPO market set for rebound in 2017 H2
- Record high capital raising is expected with blockbuster listings in the pipeline
- Strong post-IPO performance of the companies listed in 2017 H1 to drive positive market sentiment
Singapore, 3 July 2017 — Fund-raising through initial public offering (IPO) in the first half of 2017 is expected to hit S$3.03 billion from nine IPOs, one registration and three lodgements, the highest since 2013 for the same period. The performance of the first six months reinforces positive investor sentiments for Singapore’s equity market. This includes the Mainboard business trust lodgement by NetLink NBN Trust which is expected to raise approximately S$2.5 billion, making it one of the largest business trusts on the Singapore bourse.
There were nine IPOs in 2017 H1 compared to three in 2015 and seven in 2016 for the same period. “We are seeing a great start to the IPO activity this year with nine IPOs. If we take into consideration the one registration and three lodgements as at 30 June 2017, we are seeing unprecedented level of funds raised since 2013,” said Dr Kan, Deputy Managing Partner (Markets), Deloitte Singapore.
In the first six months of 2017, all IPO listings showed positive post-listing performances both at first-day closing and current prices with an impressive average of 40% increase in share price since IPO. UnUsUaL Limited was the top performer with first-day closing price of S$0.435, up 118% and current share price of S$0.510 as at 30 June 2017, up 155% from its IPO price of S$0.20.
Commenting on the outlook for the remaining part of 2017, Dr Kan expressed: “We are expecting a strong pipeline of blockbuster listings in 2017 H2 and coupled with the strong post-IPO performance of the companies listed in 2017 H1, Singapore’s IPO market is certainly buzzing with excitement.”
Two of the companies listed in 2017 H1, Kimly Limited and Aoxin Q&M Dental Group Limited, have both made sizeable acquisitions within two months since IPO. Capital raising has served to expedite their expansion plans, sending a positive signal to their investors and other potential IPO aspirants.
“With the Singapore Exchange (“SGX”) actively engaging tech start-ups and small-and-medium sized enterprises (SMEs) on how they can attract investment from private and public capital markets to support their expansion, we can certainly look forward to more IPOs,” added Dr Kan.
On how Singapore’s capital market will benefit from China’s One Belt, One Road Initiative, Dr Kan said, “There is a lot of potential with the significant increase in foreign direct investments from China into Southeast Asia countries and this is expected to continue rising. The Belt & Road will also create positive spillover effects from initial infrastructure projects and further facilitate investments.”
Overview of Singapore IPOs in 2017 H1
Singapore saw nine IPOs in the first six months of 2017 with S$464 million in proceeds and a total market capitalisation of S$2.14 billion, according to data released by Deloitte Singapore. Of the nine, eight company IPOs raised S$310 million with S$1.7 billion market capitalisation and one Business Trust on the SGX Mainboard with raised S$154 million in proceeds and S$440 million market capitalisation at IPO. This compares to the seven IPOs in the first half of 2016, which raised S$1.6 billion with market capitalisation of S$2.24 billion.
Of the nine IPOs, seven were Catalist listings, which raised S$125 million funds with S$804 million in market capitalisation, versus five Catalist listings year-on-year, in the same period in 2016 with S$55 million funds raised and S$250 million in market capitalisation.
As for the two Mainboard listings, the largest IPO was HRnetGroup Limited with the highest funds raised S$174 million and market capitalisation of S$867 million, followed by Dasin Retail Trust which raised S$154 million with a market capitalisation of S$440 million. Deloitte acted as the reporting accountant for both Mainboard listings in 2017 H1.
1 The S$3.03 billion comprises three lodged deals including NetLink NBN Trust which is expected to raise approximately S$2.5 billion, one registered deal, and nine IPOs with total proceeds of S$464 million at 30 June 2017. Y Ventures Group Ltd. registered on 30 June 2017 is priced at S$0.22 and expects to raise S$8 million.
2 Estimated using average amount raised computed based on minimum and maximum offer price extracted from the preliminary prospectus of S$0.80 and S$0.93 respectively.