Jul 30, 2014

    Slew of IPOs as sentiment improves

    AFTER a slow start to the year, a sunnier outlook for new listings in the second half of the year will see a swathe of companies raising funds from Singapore investors, and the momentum could carry into next year.

    A notable number of firms across sectors have made inquiries or are kick-starting the initial public offering (IPO) process, said investment bankers, lawyers, audit firms and analysts.

    The firms include several mineral, oil and gas companies, particularly explorers and producers, and offshore supply vessel companies.

    There are also companies from China, Malaysia and Indonesia, shipping businesses, food and agriculture companies, real estate firms, Singapore companies looking to spin off subsidiaries, and secondary listings.

    "Sentiment seems good and positive. We do feel like we're getting a lot of indications of interest," said Gail Ong, head of equity capital markets practice at law firm WongPartnership.

    "If all goes well, in terms of good market support globally, the second half could be stronger than the first. We're seeing quite a number of new deals kicking off as well. Typically, the IPO process takes six to eight months. It seems like there will be a stream going into Q1 2015," she added.

    Ernest Kan, Deloitte's chief of operations for clients and markets, said that in the last few months there have been "quite high" levels of inquiries, and some clients have started "signing off the mandate".

    Deloitte is involved in the largest listing on Singapore Exchange (SGX) this year - Accordia Golf Trust - which raised around $758 million from investors and will start trading on Friday afternoon.

    Accordia is a business trust which owns golf courses in Japan. Accordia's listing is expected to drive second-half listings comfortably past the $1 billion mark. In the first half of the year, close to $1.37 billion was raised.

    After a slow first half, July has seen a flurry of IPOs on SGX, with two mainboard and two Catalist listings raising $483 million.

    Tan Jeh Wuan, DBS Bank head of capital markets Singapore, said he was optimistic that the IPO market would be more active in the second half, due to a pipeline built up from deals deferred in the first half.

    Issuers had taken advantage of renewed interest recently to complete deals before the summer holidays, when many investors in the West are on vacation, he noted.