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Singapore's neighbours are catching up in IPO leaderboard

SINGAPORE is on track to keep its spot at the top of the South-east Asia IPO leaderboard for a second straight year, as the sum of funds raised here looks set to surpass S$4 billion by the year's end.

But the IPO momentum elsewhere in the Asean neighbourhood has also gained pace, making rival stock markets like Thailand and Malaysia more and more attractive.

Dr Ernest Kan, deputy managing partner for markets at Deloitte Southeast Asia told reporters on Thursday: "Other countries in South-east Asia are getting more exciting. Five, eight years ago, I wouldn't even talk much about them but in the last two, three years other countries have come up. Now, the other markets really have something to compare with us. They are catching up."

In fact, Thailand is the clear leader with regards to the size of companies that sought listings from 2014 to 2017.

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So far this year, IPOs in Thailand have added a combined market cap of S$11.5 billion to the Thai bourse. By contrast, the total market cap of Singapore companies that went public from the start of the year till Nov 15 is about S$6.56 billion, said audit and consulting firm Deloitte.

And while the sum of money raised through IPOs in Singapore this year has jumped from S$2.26 billion in 2016 to S$3.66 billion as at Nov 15, NetLink NBN Trust's IPO accounted for a whopping S$2.3 billion of that.

Malaysia IPOs raised S$2.35 billion so far this year - six times what was raised last year - but that figure was likewise boosted by the blockbuster listing of petrochemical producer Lotte Chemical Titan.

Thailand on the other hand consistently raises at least S$2 billion through IPOs every year. The kingdom has raised S$2.34 billion so far this year.

A big part of that - S$1.34 billion to be exact - has come from the energy and resources sector. Thailand is rich in natural resources such as coal, noted Dr Kan.

Moreover, the Thai government has pledged to develop the renewable energy sector, with plans to increase the use of renewable energy by five times by the year 2036, he said. The amount raised by this sector has also grown steadily over the past four years.

Thailand's Reit sector is gaining ground too. Over the past four years, Reit IPOs in South-east Asia raised a combined S$7.1 billion. Singapore-listed Reits accounted for S$4.4 billion, Thailand-listed Reits for S$2.5 billion and Malaysia's for S$154.9 million.

Indonesia has consistently raised S$1 billion a year in IPOs for the past four years, and raised S$1.04 billion so far this year.

Vietnam has a high IPO count, with many names coming from the consumer business and industrial products segments, but these firms also tend to be smaller in size.

In Singapore, public appetite for IPOs has also returned in a big way this year.

Ten of the 15 IPOs floated here in the year to Nov 15 offered a public tranche, whereas only eight of the 16 companies that debuted last year did the same. This year's IPOs were over-subscribed at a median of 31.8 times, versus a median of seven times in 2016.

As well, the 10 Catalist IPOs done in the first 10.5 months of 2017 had a median IPO price-to-earnings ratio of 11.3 times, versus 9.6 times last year and 8.7 times in 2015.

Ms Tay Hwee Ling, audit and assurance partner at Deloitte, said: "The market is willing and able to attach a higher valuation to these Catalist companies."

Meanwhile, November continues to be a busy month for Singapore IPOs.

RE&S Holdings debuted on the Catalist board on Wednesday. Mindchamps debuts on Friday and No Signboard commences trading on Nov 30. Also on Wednesday, Cromwell European Reit lodged a revamped prospectus after aborting a first IPO attempt.

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