Equity issuing activity and proceeds on SGX take hit in H1 (Amended)

EQUITY capital raised on the Singapore Exchange fell 40 per cent year-on-year in the second quarter of 2015 as volatile market conditions continued to crimp fundraising, preliminary data from Thomson Reuters shows.

Proceeds from stock sales in Q2 amounted to US$826.2 million - more than five times what was raised in an exceptionally quiet first quarter with zero initial public offerings (IPOs), but still far from enough to match year-to-date activity in 2014. IPOs and secondary offerings in the first half of 2015 raised a total of US$975.7 million, 54 per cent less than that raised in the first half of last year.

"Volatile market conditions have led to a scarcity in initial public offerings in Singapore stock exchanges so far this year, from both local and foreign issuers," Thomson Reuters said, noting that deal sizes shrank and companies headed for the Catalist board.

Malaysia-based GCCP Resources raised US$207.7 million from its Catalist listing. Total IPO proceeds raised locally of US$228.3 million so far this year mark a 79 per cent year-on-year decline.

Singapore-domiciled companies, in general, tapped equity capital markets more in Q2 than in Q1.

Total equity proceeds from Singaporean companies - whether raised in Singapore or overseas - came up to US$1.2 billion in Q2 this year - more than eight times Q1's dismal US$120.5 million. But the first-half total of US$1.3 billion was still 30 per cent down from the US$1.8 billion raised in the first half of 2014.

The real estate sector dominated equity fundraising activity in the first half, generating proceeds of US$618.8 million, 48.5 per cent of Singapore equity capital market activity. This includes CapitaLand's convertible issue and Soilbuild Business Space Reit and Viva Industrial Trust's follow-on issues.

Energy and power issuers - such as Keppel Infrastructure Trust and Ramba Energy - accounted for 32.6 per cent of the activity, raising US$416 million in proceeds.

Most of the equity fundraising by Singapore-based companies was done through follow-on offerings, which accounted for US$754.6 million of H1's proceeds, 4 per cent lower year-on-year.

There were only three IPOs during the period - LHN and Singapore O&G in Singapore, and Netccentric Limited's listing on the Australian Stock Exchange. These raised a total of US$28.4 million, a 98 per cent drop from 2014's first half.

Thomson Reuters and Freeman Consulting Co estimate that US$27.1 million in fees has been collected by equity capital market bankers from Singapore-owned companies' equity deals this year, down 27 per cent year-on-year.

JP Morgan currently leads the fee rankings for Singapore equity issuance, with US$9.4 million in estimated fee revenue, capturing 34.5 per cent of the total.

An earlier version of this story named Crystal Trust as one of the issuers in H1, based on Thomson Reuters' report. This should have been Keppel Infrastructure Trust, the enlarged trust formed by CitySpring Infrastructure Trust's acquisition of the former Keppel Infrastructure Trust. Crystal Trust is what the former Keppel Infrastructure Trust was renamed to avoid confusion, and was delisted on May 22. The article above has been edited to reflect this.

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