Equity Capital Markets Watch - Singapore

H1 2020

Key observations from our Equity Capital Markets Watch: Singapore, H1 2020

Singapore’s H1 2020 IPO Performance

COVID-19 has caused a slowdown in Singapore Initial Public Offering (IPO) activities. There were only six IPOs, raising a combined funds of S$0.7 billion, for the period from 1 January 2020 to 26 June 2020, which was a decline as compared to eight IPOs, raising a combined funds of S$1.5 billion for the same period last year.

Following the trend, the number of follow-on (FO) activities in Singapore have decreased to four for the period from 1 January 2020 to 31 May 2020, from 10 in the same period last year. Fund raise via FO transactions have also fallen from S$1.7 billion in the prior period to S$0.4 billion for the current period of 1 January 2020 to 31 May 2020.

REITs to continue to pivot the local IPO market scene

  • The pipeline for REITs, especially industrial properties asset class, will continue to be strong and the recent revisions of its regulatory regime by MAS, e.g. extending timeline for REITs to distribute their taxable income to qualify for tax transparency, raising the aggregate leverage limit and deferring the minimum interest coverage ratio to 2022, are strong catalysts for more REIT IPOs to come.
  • Healthcare, including medical technology, is one of the strongest performing sectors in the first half of 2020. Singapore, being the Center of Excellence for healthcare and R&D hub for medical technology, together with a high average trading price earning ratio, makes SGX an attractive venue for these companies to raise funds here.
  • The technology sector has been a direct beneficiary of the COVID-19 pandemic due to the telecommuting trend and increasing demand for digital transformation. E-commerce companies could witness impressive revenue growth. These companies could explore listing on SGX to raise capital, for brand awareness and regional market penetration.

Looking ahead

What to expect in H2 2020 - Singapore

“With the easing of Circuit Breaker measures and fiscal stimulus provided by the local government, the Singapore equity markets should see some short term recoveries. However, we believe that the ability of sustainable recovery in the local market will be dependent on how soon global trade activities will resume given that Singapore’s economy is closely intertwined with global supply chains.

We foresee healthcare and niche sectors within the technology space to spur the growths for the local equity capital market. S-REITs will also continue to pivot the local IPO market, although S-REITs with assets exposure to the retail and hospitality sectors could have a longer recovery path.”

Tham Tuck Seng, Capital Markets Leader, PwC Singapore

Contact us

Marcus Lam

Marcus Lam

Assurance Leader, PwC Singapore

Tel: +65 6236 3678

Tham Tuck Seng

Tham Tuck Seng

Partner, Capital Markets, PwC Singapore

Tel: +65 9618 3776

Rebekah Khan

Rebekah Khan

Partner, Assurance - Capital Markets, PwC Singapore

Tel: +65 9731 4358

Alex Toh

Alex Toh

Partner, Capital Markets, PwC Singapore

Tel: +65 9112 7130

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