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DBS eyes "defensive" companies in capital markets strategy

As a key player in the IPO market, DBS said it will look at bringing  more "defensive" companies to list on the Singapore bourse.

SINGAPORE: As a key player in the IPO market, DBS said it will look at bringing more "defensive" companies to list on the Singapore bourse.

This is part of its efforts at recalibrating its capital markets business to reflect the shift in investor sentiment.

If all goes to plan, DBS Bank said investors can expect more dividend-paying companies and real estate investment trusts (REIT) to come to market.

According to its capital markets group, such counters are attractive and appeal to today's investors.

DBS said it appears there is a bias towards bonds this year.

“Dividend play, yield products, at the same time they (investors) are looking for good companies in industries that are stable, with good growth potential,” said Eng-Kwok Seat Moey, deputy head of the capital markets group at DBS Bank.

“Investors are very cautious because of the volatile market, but they are looking at defensive play now and we do have a huge pipeline for the REIT transaction."

Mrs Eng-Kwok has been appointed head of capital markets at DBS, starting from June 1. She said one immediate task will be to grow the business and look for opportunities in the equity and REIT market.

In her new role, Mrs Eng-Kwok will oversee a total of 70 staff in the region, focusing on equity fund raising which includes initial public offerings (IPOs), REITs and rights issues.

She will report to DBS CEO Piyush Gupta and become a member of the bank's group management committee (GMC).

“In terms of geography the three key markets we are looking at now is actually Indonesia, Singapore and Hong Kong,” said Mrs Eng-Kwok.

“(We) bring in companies from outside Singapore or Hong Kong into Singapore or Hong Kong to list. In Singapore, we have the dual listing platform. We have Malaysian, Australian and Hong Kong companies dual-listed here.

“So we see a lot of opportunities… and also in terms of asset classes, we see a lot of opportunity in bringing asset classes outside Singapore to Singapore to list."

Mrs Eng-Kwok will take over from Mr Eric Ang, who will continue to play an active role at the bank after June 1.

He will be responsible for business origination and high-level relationship building for DBS.

He will also join the Board of the DBS Foundation, which was set up earlier this year to strengthen DBS' efforts at corporate social responsibility.

Mr Ang and his team have pioneered many industry firsts, including being lead manager for the IPO of Singapore Airlines, managing SingTel's IPO as well as launching Singapore's first REIT.

While the IPO market in Singapore has been slow moving this year, he said DBS has a strong pipeline in the second half of the year.

"I am still optimistic,” said Mr Ang.

“I think we shouldn't forget that the markets have not collapsed. The markets are holding itself; it is just that investors are taking a wait and see attitude. There is still time for us to launch issues and close issues before the year end.

“I think the challenge for Singapore is the size but if you put aside the size, in fact, Singapore is an ideal centre to raise funds. We are the major financial centre and as the major financial centre, it is easier to tap the markets here than anywhere else including Hong Kong."

Last year, DBS topped the Singapore equity league table with 21 new issues amounting to nearly US$1.97 billion, representing about 18 per cent of market share. 

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