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Equity capital markets watch

Singapore, H1-2021 review

Initial Public Offerings (IPOs) in H1-2021: Key highlights

Global

Strong positive global market conditions led by government-backed stimulus programmes, post-pandemic optimism fuelled by vaccine rollouts and improved macroeconomic indicators.
Global IPO proceeds in H1-2021 already over 80% of IPO funds raised in 2020. IPO funds raised globally in H1-2021 surged to US$282.0 billion from US$62.9 billion in the same period last year.
The US, China and Hong Kong continued to dominate the global IPO arena.
Accelerated listing momentum from Special Purpose Acquisition Companies (SPACs).

Singapore

Singapore IPO market performance for H1-2021 was down compared to H1-2020. Quiet first half for Real Estate Investment Trust (REIT) with no listings on SGX.
Number of new IPO fell from five in H1-2020 to three in H1-2021
Total funds raised declined from S$0.7 billion in H1-2020 to S$0.4 billion in H1-2021.
Aztech Global Ltd listing on the SGX Mainboard marked the largest local IPO in H1-2021, with the company raising S$314.4 million.
Econ Healthcare and OTS Holdings listed on SGX Catalistboard.
Number of FOs for H1-2021 increased to 16 from four in the same period last year, with REIT and real estate developers dominating the arena.

SPACs – Top trend in 2021

With strong SPAC momentum building up in the US, key Asian bourses including SGX are considering rule changes to allow for SPAC listings. SGX’s consultation paper issued on 31 March 2021, seeking public feedback on a proposed regulatory framework for SPAC listing on its Mainboard, closed on 28 April 2021.

Key factors driving the SPAC boom

Volatile IPO markets

Volatile IPO markets have made it difficult to determine the right IPO “window”, while the SPAC market is generally less impacted.

Interest from small and mid-sized companies

Increasing acceptance by small- and mid-size companies, that make-up the SPAC target company population, who are not the typical traditional IPO candidate.

Flexible deal terms

More ability to structure flexible deal terms has led to increased buy-side and sell-side interest by financial sponsors and experienced management teams.

Sophisticated public investors

SPAC mergers typically provide investors with more transparency and access to management as compared to IPOs.

Experienced management backing

Resurgence of a new generation of SPACs backed by experienced management teams and sponsors with successful track records and long histories of strong performance for investors.

Key observations in H1-2021

Uneven capital markets recovery across different regions.
Slowdown in local capital market activities due to recent new waves of COVID-19 cases.
SPACs continue to be a leading investment trends in the region.

Outlook for H2-2021

Strong local IPO pipeline, buoyed by technology and REIT sectors, expected to boost investment activities in H2-2021.
Finalised SGX SPAC listing framework to further spur capital market activities in Singapore.