- POSTED: 27 Sep 2013 19:24
- UPDATED: 27 Sep 2013 23:16
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Initial public offerings (IPOs) in Singapore raised a record S$4.3 billion in the first nine months of this year. And outside of the US, listings in Singapore raised the most money in the world in the third quarter period between July and September.
SINGAPORE: Initial public offerings (IPOs) in Singapore hit a record in the first nine months of this year.
And outside of the US, listings in Singapore raised the most money in the world in the third quarter period between July and September.
Driven largely by real estate investment trust, or REIT listings, IPOs on the Singapore exchange raised a record S$4.3 billion (US$3.4 billion) year-to-date, up 6 per cent from a year ago, according to data from Thomson Reuters.
This as equity markets in the rest of Asia Pacific languished, with IPO proceeds in non-Japan Asia down 40 per cent.
Matthew Song, Head of Equity Capital Markets for Southeast Asia at HSB, elaborated: "We saw a slowdown of IPOs from North Asia, especially with the suspension of IPOs coming out of China. We also saw a pretty weak IPO environment coming out of Malaysia, for the first half."
Major listings in Singapore include SPH REIT, OUE Hospitality Trust, as well as the S$1.6 billion dollar listing by Mapletree Greater China Commercial Trust.
That is the second largest IPO in Asia Pacific so far this year and HSBC Bank estimates there is at least a billion dollars’ worth of IPOs coming up in this year's pipeline.
Mr Song said: "There will still be a pretty decent-sized IPO coming out of the REIT issuances. F&N has disclosed that they might be doing a hospitality trust. OUE has just announced that they will be doing an office REIT. We will also see some Indian issuers accessing the capital markets through a business trust."
Other high-profile IPOs said to be headed for the Singapore market include a trust by Malaysian lottery operator Berjaya Sports Toto and a REIT by Lotte Shopping, South Korea's largest department store operator.
But some analysts say there is a risk of having a stock market that is too focused on REIT and trust listings.
Terence Wong, Head of Research at DMG & Partners Research, explained: "So our IPO volume looks robust but the worrying thing is that it's largely driven by a lot of these REIT and business trust listings. If the sector were to start to see any kind of weakness or capitulation, then I think there will be a lot of pull out."
Earlier this year, REITs were sold down by investors on fears that rising interest rates will hurt their business prospects.
The benchmark FTSE ST REIT Index fell by close to 30 per cent to a low of 700 points in August.
It has since recovered to around 740 points.