Placements beat rights as companies take quickest route to funds

Placements of S$3.1b so far this year surpass rights issue total as volatility picks up

Published Thu, Nov 15, 2018 · 09:50 PM

Singapore

WHEN time is of the essence, share placements beat rights issues for companies in need of funds - especially when market volatility is up.

Bankers say placements are increasingly the capital-raising instrument of choice for listed companies because dealing with strategic or institutional investors may be more efficient and faster in a volatile market, especially when it involves time-critical acquisitions or deals.

The numbers back this trend. For the first 10 months of 2018, funds raised from institutions via placements came to S$3.1 billion, significantly more than the S$2.2 billion from rights issues, bringing the total funds raised to S$5.3 billion.

In comparison, over the same period a year ago, funds from rights issues amounted to S$5.8 billion while placements netted S$3 billion, …