The pace of new listings, which was largely staid for the better part of the year, has picked up as 2021 draws to a close, and the industry is looking forward to the momentum being carried forward into the new year.
“It is hoped that the new framework on Special Purpose Acquisition Companies (Spac) listings, introduced in September, will help Singapore’s capital market bounce back from this dry IPO spell to outperform last year,” says Deloitte in its annual take on the regional IPO scene.
While the Singapore Exchange (SGX) has yet to see a Spac listing, the new framework could woo the region’s IPO hopefuls to list here, says Tay Hwee Ling, disruptive events advisory leader for Deloitte Southeast Asia and Singapore. “By enhancing secondary listing rules and introducing the Spac framework, listing aspirants in Southeast Asia with familiar local names have more options and can list closer to home.”
To help broaden the catchment of potential Spac deals, SGX on Nov 25 announced that Cantor Fitzgerald, a leading Spac deal-maker, has been given an accredited issue manager status. This means Cantor will be among the 42 firms allowed to advise Mainboard listings here.
Several Spacs have reportedly filed their applications, backed by the likes of Tikehau Capital, Novo Tellus Capital Partners and Vertex Ventures, although none has been formally lodged thus far.
High-growth enterprises can also tap the Anchor Fund, says Tay. In September, the government established Anchor Fund @ 65 along with Temasek Holdings, together coinvesting $1.5 billion. The fund will support high-growth enterprises eyeing an IPO, including secondary and dual listings on SGX.
The fund is managed by Temasek’s 65 Equity Partners, which also manages Local Enterprise Fund @ 65, a joint $1 billion fund with the government announced at the 2021 Budget earlier this year.
In addition, EDBI — the venture arm of the Economic Development Board — has set up the $500 million Growth IPO Fund to give growing companies a leg-up to an IPO here.
Interestingly, EDBI has invested at the pre-IPO stage in one of the recent listings, Mooreast Holdings.
The company, which specialises in providing mooring systems, is issuing a total of $10 million in convertible notes to EDBI. It priced its IPO at 22 cents and raised $8.5 million to expand from offshore to the renewable energy sector. It made its trading debut on Nov 24. Its share price went as high as 30.5 cents before closing at 24.5 cents on Nov 25.
Two other IPOs — both REITs — are also underway. Daiwa House Logistics Trust and Digital Core REIT mark the first REIT listings in 20 months. The last REIT to list on SGX, which has acquired a reputation for being the leading regional REIT hub, was United Hampshire US REIT in March last year, just as the Covid-19 pandemic hit.
Mixed scorecard
According to Deloitte, there was a total of 11 IPOs last year with a total of US$968 million ($1.32 billion) raised. This year, to date, six IPOs have started trading on SGX. They have raised total proceeds of $378 million.
This amount does not include Daiwa House Logistics Trust, which is raising around $575 million. Applications for Daiwa House’s offer closed on Nov 24.
The bulk of the proceeds were raised by Aztech Global, which raked in $314.4 million in gross proceeds. The remaining issues, including Mooreast, raised between $7.8 million and $19.6 million.
The post-listing performance thus far for these new issues is mixed. Trans-China Automotive, the most recent IPO prior to Mooreast, listed on Nov 11. It was priced at 23 cents and closed at 29 cents on Nov 25.
Another listing, Audience Analytics, which was offered at 30 cents, was 36% down at 19.1 cents as at Nov 25.
OTS Holdings, which focuses on meat products, was sold at 23 cents per share and closed at 28 cents as at Nov 25, up 22%.
Econ Healthcare, which is listing on SGX for the second time after it was taken private back in 2012, was up 8.9% since its IPO. It was sold at 28 cents.
Aztech Global, the first listing this year, was offered at $1.28 and closed at $1.02 on Nov 25, down 20%.
However, aside from companies going public recently, there are also secondary listings and launches of other quoted products. For example, Sri Trang Gloves (Thailand) made its secondary listing on May 10, less than a year after listing on the Stock Exchange of Thailand (SET).
There are also the exchange traded funds (ETFs), such as CSOP iEdge S-REIT Leaders Index ETF and UOB APAC Green REIT ETF. Inclusive of ETFs, November has seen four listings on SGX, chalking up a total of 11 debuts year-to-date, compared to 16 in 2020.
Thailand leads again
According to Deloitte, Asean as a whole recorded “robust” IPO activity for the first 10½ months of this year, raising a record US$9.8 billion from 121 IPOs thus far, outperforming the full calendar-year 2020.
The number of IPOs increased by 6%, total funds raised rose by 39%, and the total IPO market capitalisation grew by 24% compared to the full 12 months of last year.
Thailand remains the leading Asean IPO market for the third consecutive year. There were 36 new listings with a total of US$4.2 billion raised, or 43% of the Asean total.
Deloitte attributes this to the country’s “stable economy, strong currency, low interest rates and consistently strong domestic liquidity”.
Deloitte is hopeful that Singapore can still try and gain some benefits from this busy regional IPO scene. “The emergence of more IPOs from Southeast Asia will trigger a positive effect and help increase the dynamics of Singapore as an international capital market that provides listing aspirants with a growth platform,” says Tay.
