Singapore’s IPO market sustains funds raised in the first half of 2021, Deloitte expects innovative listing options to offer diversification to investors, stimulating the IPO market in the second half of the year

SINGAPORE, 9 July 2021 – Singapore’s initial public offering (IPO) market witnessed a slowdown in IPO activity in the first six months of 2021, amidst the ongoing Covid-19 pandemic. There were three IPO listings with S$337 million in proceeds raised and an IPO market capitalisation of S$1.11 billion. Of the three listings, two Catalist IPOs raised a total of S$23 million while the sole Mainboard listing raised S$314 million. As at 30 June 2021, there was one lodgement on the SGX.

According to findings in Deloitte’s mid-year review of the 2021 Singapore IPO market, there is a growing trend in SGX Mainboard listings in recent years which saw S$314 million in the first half of 2021 and S$619 million in the second half of 2020. For large local companies that are considering an IPO on the local exchange, this presents a positive outlook. News reports of a possible blockbuster REIT listing in Q3 of 2021 by City Development Limited should also boost REITs and Business Trusts as they continue to have significant presence on the SGX.

On top of the three IPOs in SGX, Singapore also welcomed the secondary listing of Sri Trang Gloves Thailand (STGT) in May 2021. It is primary listed on the Stock Exchange of Thailand and is the largest manufacturer and distributor of rubber gloves in Thailand as well as the third largest in the world. In a move to enhance the attractiveness of secondary listings on the SGX, waivers were granted by the multi-asset exchange to STGT for its secondary listing.

The SGX's secondary listing platform also appeals to Southeast Asia-based companies that are listed in the United States (U.S.), demonstrating SGX's diverse reach. Singapore’s stable economic and political systems, time and cost-efficient streamlined listing processes, as well as wide investor outreach and extended trading hours are attractive considerations for companies to use SGX to raise funds for capital investments.

Beyond Singapore, Ms TAY Hwee Ling, Disruptive Events Advisory Leader, Deloitte Southeast Asia and Singapore acknowledged there has been sizeable listings on the key exchanges in Southeast Asia. “Many of these companies come from consumer-based businesses where the local brand holds great value within the local investor market. Should they cross over to the U.S. market, they may not receive the same level of attention as U.S. investors may not be familiar with them. While there is a healthy competition, the exchanges each have a niche and a competitive advantage within their local markets,” said Ms Tay.

While many firms have been badly hit by the COVID-19 pandemic, it has also created new opportunities for those in growth sectors. "This is not just about the traditional tech sector. As people get used to trading and shopping online, we will see more new economy businesses at various growth stages. Consumer businesses, including those in the food and beverage and services industries, will be needing funds to tap opportunities and differentiate themselves from competitors,” explained Ms Tay.

“Many of these companies seeking new funds are looking to expand their capacity instead of just acquiring additional working capital. There could be potential opportunities for companies to go into mergers and acquisitions, buying over smaller competitors in the market,” added Ms Tay, who expects capital market momentum in Singapore to continue throughout the year.

With the global pandemic causing extreme market volatility, a growing number of companies are opting for the alternative route to an IPO by merging with a Special Purpose Acquisition Company (SPAC). A SPAC listing allows companies to go public in just eight weeks, more quickly than a traditional IPO and offers flexibility to asset owners to identify their portfolio assets as a business combination target.

“SPAC listings have attracted interest in major markets due to their speed to market and ability to offer price certainty in valuing target companies. SPAC listings provide an additional option to listing aspirants to tap on the capital market for their business needs and we expect to see interest from investors in the region,” said Ms Tay.

For additional statistics on Singapore’s capital market in the first six months of 2021, please refer to the “Singapore IPO market 2021 Mid-Year Report”.