- POSTED: 17 Dec 2013 22:51
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The Singapore Exchange has attracted a third, or 28 per cent, more initial public offerings (IPOs) this year than last year. This is according to data from Deloitte Singapore, which also expects more listings next year.
SINGAPORE: The Singapore Exchange (SGX) has attracted a third, or 28 per cent, more initial public offerings (IPOs) this year than last year.
This is according to data from Deloitte Singapore, which also expects more listings next year.
The auditing firm said there have been more queries from companies about listing in Singapore, 50 per cent more in the last three months of 2013 compared to the same period in 2012.
But some market experts told Channel NewsAsia that reverse takeovers (RTOs) could be more popular for companies that are looking to participate in capital markets.
Real estate investment trusts like Mapletree Greater China Commercial Trust and SPH Reit, with combined market capitalisation of S$4.7 billion, dominated the Singapore IPO market in 2013.
In all, the 26 IPOs raised S$6.22 billion in 2013, 28 per cent more than the S$4.86 billion raised from 22 listings in 2012.
Besides a brighter economic outlook, the IPO market can expect a boost in 2014 following the recently announced "direct listing framework".
This requires China-incorporated companies to get approval from stock exchange regulators both in Singapore and China.
Ernest Kan, head of IFRS and Offerings Services Group at Deloitte Singapore, said: "With this framework established by SGX and CSRC (China Securities Regulatory Commission), more companies can consider going into this framework and get themselves listed. This is an additional avenue."
Traditionally, most S-Chip companies hold their China assets in companies incorporated in places like Bermuda or the British Virgin Islands -- a listing route Deloitte said only fewer than 10 China companies are currently exploring.
But some experts noted that the stock markets could turn unfavourable to new listings.
CIMB Research’s associate director Benjamin Goh said: “But if you look at it there is probably going to be a small correction in the second half of 2014, and that is when I think the pace of IPOs is going to slow down.
“So if you take the case of China, right now they are greenlighting a lot of IPOs. If you take a look at all the IPOs launched in China, not many of them are going to be taken up. That is the problem heading into 2014, not just in Singapore, but also in the US."
Meanwhile, some market watchers said that RTOs could become a more popular route for companies to get listed.
So far, there have been six RTO deals in the SGX this year.
This is according to data from American Appraisal.
RTOs came into the spotlight after Catalist-listed Albedo, a waning steel and raw materials trader, was injected with huge parcels of land in Malaysia's booming southern growth corridor Iskandar with payment in the form of new Albedo shares.
The US$621-million deal became 2013's biggest RTO exercise.