Singapore, Malaysia revitalise Southeast Asia’s IPO market

KUALA LUMPUR — Capital markets across Southeast Asia produced record-high capital raising activity in 10.5 months of 2017 with 144 initial public offerings (IPOs) hitting S$10.4 billion in total funds raised.

With a market capitalisation of S$33.9 billion according to data from Deloitte Singapore – the highest since 2014, it reflects positive listing decisions and investor confidence in Southeast Asian exchanges, says Deloitte.

The growth led by seven blockbuster listings includes two deals each in Malaysia and Singapore and three deals in Thailand.

The Singapore Exchange (SGX) saw 15 deals this year as at 15 November 2017 and the total amount of funds raised at S$3.7 billion have surpassed the last three years to be the highest in four years.

This includes two company IPOs and three trusts on SGX Mainboard with S$248 million and S$3.2 billion funds raised respectively, and S$1.1 billion and S$4.3 billion market capitalisation at IPO.

On the Catalist board, there were 10 deals that raised S$202 million with a market capitalisation of S$1.1 billion.

Responding to the performance of the Singapore IPO market for 2017 after 10.5 months, Ms Tay Hwee Ling, Global IFRS & Offerings Services Leader, Deloitte Singapore, pointed out that Singapore already sees 15 deals as compared to 16 deals last year while the amount raised this year increased 61.8% and IPO market capitalisation increased by 49.1%.

Post 15 November 2017, the market saw one additional listing and three registrations/lodgements, which includes Cromwell European Real Estate Investment Trust that has an anticipated market capitalisation of S$1.4 billion. Deloitte expects Singapore’s IPO market to close the year with more than 20 IPOs.

“Liquidity in Singapore’s equity market remains high as there were more IPOs with public offer tranche in the last 10.5 months. Of the 15 IPOs to date, there were ten public subscriptions and all were oversubscribed at a median of 32 times and an average of 103 times,” said Ms Tay.

Mainboard-listed NetLink NBN Trust took the top spot in Southeast Asia with S$2.45 billion raised, creating the largest IPO in Singapore since 2011.

Malaysia’s Lotte Chemical Titan Holding Berhad raised the second highest amount at S$1.2 billion, boosting Bursa Malaysia’s profile, despite a decline in a number of new IPOs. Meanwhile, Indonesia and Thailand have consistently raised S$1 billion and S$2 billion respectively in the past four years.

Jumbo listings in Southeast Asia’s IPO market contributed to the outstanding performance in terms of total IPO funds raised and the total number of new listings.

Noting the strong GDP growth in each of the Southeast Asian economies, Dr. Ernest Kan, Global IFRS & Offerings Services Leader, Deloitte Southeast Asia said he expects to see this trend continuing into the next year with the liberalisation of China’s foreign investment policy.

He also said the steady rise of REITs and Business Trusts in each of the Southeast Asian markets which generally are of mega-size market capitalisations will contribute to the positive trend.