SINGAPORE (Dec 19): Despite concerns about a slowing economy, 2019 has ticked all the right boxes for Singapore as the city-state hit record-highs in terms of investment banking activities, as well as mergers and acquisitions (M&A).
According to data collated by Refinitiv, M&A activity in 2019 surged 57.5% y-o-y to US$116 billion ($157 billion), making it the strongest annual period recorded by Refinitiv. This was led by Blackstone Group’s US$18.7 billion acquisition of GLP’s US logistics assets, which is the largest deal with Singaporean involvement on record.
Singapore-targeted M&A activity came in at US$45.2 billion in terms of deal value, a near double from the previous year. The state was also noted to be the most targeted nation in Southeast Asia, capturing some 40.6% of the total M&A activity in the sub-region.
Domestic M&A in Singapore increased 214.0% y-o-y, totaling US$27.4 billion, the best annual period on record. This was bolstered by CapitaLand’s US$7.9 billion acquisition of Ascendas, the largest domestic Singaporean deal on record.
The lion’s share of the deal making activity in Singapore involved the real estate sector at 47.2%, or a total of US$54.7 billion. This was a 160% increase from the previous year. This was followed by financials with 14.8% market share and US$17.2 billion in deal value, while industrials came in third with a 10.6% market share and US$12.3 billion in market value.
Singapore investment banking activities generated US$868.1 million in fees in 2019, some 22.1% higher than the previous year. This was the strongest annual period recorded since 2000.
Notably, DBS Group Holdings emerged the frontrunner in this segment - earning $102.4 million in investment banking fees for the year, translating into an 11.8% share of the total fee pool which earned the bank the top place in this area.
On the equity capital market (ECM) front, Singapore equity and equity-linked proceeds saw a 90.9% increase from the previous year, coming in at US$9.6 billion year to date. This also marked the best annual period since 2013.
Refinitiv noted that the increase was spearheaded by REIT initial public offerings (IPOs), which saw a five-fold increase from 2018 to US$1.9 billion. The largest Singaporean IPO for the year was noted to be Prime US REIT at US$833 million.
Meanwhile, Lendlease Global Commercial REIT, Eagle Hospitality Trust and ARA US Hospitality Trust had also launched their IPOs over the course of 2019, raising US$738.4 million, US$482.1 million and US$334.2 million, respectively.
ECM underwriting fees increased 90.3% from a year ago to a nine-year high of US$208.6 million. Goldman Sachs led the pack with a 24.9% market share and US$1.9 billion in related proceeds, while DBS Group Holdings and Morgan Stanley came in second and third with market shares of 17.6% and 10% respectively.
However, debt capital markets (DCM) figures faced some stumbling blocks as primary bond offerings from Singapore-based issuers declined 11.2% from a “record-period” in 2018, raising US$32.9 billion in 2019.
Singaporean companies from the financials sector captured 57.6% market share and raised US$18.9 billion, down 19.5% from the same period last year. Notably, Sembcorp Financial Services raised US$1.1 billion in Singapore’s largest bond offering in 2019, as part of its plans to fund its offshore engineering subsidiary.
