PwC’s 2017 Report: REITs and Business Trusts Drives Singapore’s IPOs; SGX’s Delisting Woes Remains

Singapore, 3 January 2018 –The year 2017 ended with a good showing for the Singapore Exchange (SGX), with total funds raised through Initial Public Offerings (IPOs) being the highest in the past four years. In 2017, a total of S$4.7 billion raised, double that of 2016 at approximately S$2.3 million.

The SGX saw a total of 20 IPOs with seven listings on the Mainboard and 13 listings on the Catalist Board in 2017. In terms of amount raised, REITS and BT made up of approx 88% of Singapore’s IPOs in 2017. See below Fig 1.

Figure 1. IPO fund raised by sectors in 2017 (S$ million, % of market share)

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Source: PwC Singapore

Looking forward

The report states that REITs and BTs will likely continue to be the niche for SGX. The exchange has welcomed the listings of eight REITs and BTs since 2015, which combined raised a total of S$6.6 billion in gross proceeds, contributing to 85% of the total IPO funds raised over the past three years.

Despite the overall stellar IPO performance in 2017, the report also found that the delisting trend continued with 24 companies delisted in 2017. Pessimism in the market may have been in part due to the declining trading volume and muted confidence in the local equities market. Furthermore, the low valuation of certain listed companies have created merger and acquisition opportunities to buyout these companies which led to their delisting from the exchange.

Lastly, SGX is expected to face more intense competition from the Hong Kong Stock Exchange (HKEx) with a key pull factor being the perception that the HKEx offers higher valuations and liquidity. With this, the number of Singapore-based companies listed on the HKEx has more than doubled in the past year, from six companies in 2016 to 13 in 2017, and PwC foresees that in 2018 local companies will continue listing on HKEx.

See full press release here

Originally published at The Neo Dimension.

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