SGX’s IPO volume in 2017 expected to surpass 2016’s: PwC S’pore

SINGAPORE – Initial public offerings (IPO) on the Singapore Exchange (SGX) have raised US$329 million (S$454 million) in the first half of this year, showed figures published on Monday (July 3) by business consultancy PwC Singapore, which said the volume of IPO funds for the whole year is expected to surpass the previous year’s with the planned listing of Netlink Trust.

Professional services companies led the way in the first half of the year, with IPOs from recruitment firm HRnetGroup and marketing services provider Shopper360 raising the equivalent of US$134 million on the SGX, up sharply from the US$26 million raised by the professional services segment in 2016, PwC Singapore said.

Singapore’s largest listed company SingTel has received approval from the SGX to list Netlink Trust, which owns the fibre network that is the foundation of Singapore’s Next Generation Nationwide Broadband Network. NetLink Trust is expected to launch an IPO to raise up to S$2.2 billion that will build momentum for the rest of the year, PwC Singapore said.

Last year, a total of S$2.3 billion was raised from 16 IPOs on the SGX, the bulk of which was from the listing of three real estate investment trusts (Reits) - Manulife US Reit, EC World Reit and Frasers Logistics and Industrial Trust.

Mr Tham Tuck Seng, Capital Markets Leader at PwC Singapore, said: “Singapore’s first-half 2017 numbers suggest that, apart from REITs and business trusts, niche sectors in the consumer space and professional services will be the next big growth opportunity for the local exchange. As SGX bolsters efforts in supporting technology start-ups, we can also expect to see more issuances from technology-driven activities.”

Following the signings of a series of memorandums of understanding with key players in the technology and start-up ecosystem, such as A*Star’s EPTL, the Info-communications Media Development Authority of Singapore and PwC’s Venture Hub, technology and medical technology are expected to help boost growth, PwC said.

With the public consultation for dual-class shares ending earlier this year, Singapore could become a more attractive location for listing in Asia, PwC said. However, it added that with the Hong Kong stock exchange looking to introduce a third board with dual-class shares, this has become a race to see which bourse is faster to the market. As markets in the region become more sophisticated, competition will get more intense, it said.

“For Singapore to remain ahead of the curve, we must continue to maintain our existing strengths (for example, REITs and business trusts) and capitalise on new opportunities (for example, the rise of new technologies). If we continue in this direction, we are confident Singapore will continue to be relevant for investors and market players in search of future growth,” Mr Tham said.