All eyes on MAS review group as potential issuers wait on the sidelines
Forming it is an encouraging move, but IPO aspirants may opt to take in any possible changes before considering an SGX listing: observers
INITIAL public offering (IPO) interest appears to be perking up in Singapore, but potential issuers here are closely watching developments in the equities market.
Market watchers say that the Monetary Authority of Singapore’s (MAS) review of the Republic’s equities market will play a role in encouraging new listings. But the real impact will depend on what announcements are made – and when.
Set up in August, the MAS review group, chaired by Second Minister for Finance Chee Hong Tat, is looking into ways to enliven the local equities market. Industry watchers are generally positive about the review group’s establishment, but note that some companies may opt to take in any possible changes announced by the group before considering a Singapore listing.
Leon Lim, partner at TSMP Law Corporation, said: “On one hand, (there) is acknowledgement of the problem, and the review group has promised to implement measures quickly. On the other, it has caused IPO aspirants to take a wait-and-see approach.
“To be effective, the measures must have sufficient punch and should be announced soon.”
Forvis Mazars Singapore partner and head of capital markets Ooi Chee Keong believes the review group “has the potential to revitalise the IPO landscape in Singapore”.
“If it delivers on simplifying regulatory frameworks, enhancing flexibility and boosting market liquidity, it could make the SGX (Singapore Exchange) a preferred destination for listings, especially amid global economic uncertainty,” he said, adding that 2025 could be a breakout year for the IPO market.
The way Ooi sees it, Singapore’s IPO market is “at a crossroads”. There are encouraging signs of recovery, but the market’s performance has been “held back by global economic uncertainties, competition from regional exchanges, and a perception that regulatory requirements remain cumbersome”, he said.
SGX has also lost listings to overseas markets such as the US, and faced competition from alternative fundraising methods.
TSMP’s Lim noted that the availability of private capital in Singapore has also impacted IPOs, as companies aiming to raise funds may find taking private money a “far quicker and less expensive or uncertain affair”.
“The SGX is, perhaps, a victim of Singapore’s success at attracting private capital,” he added.
Despite the tepid amount, the lower number of IPOs in Singapore compared to the year before is generally consistent with a regional slowdown in equity fundraising, said observers. A Deloitte report had placed the total capital raised across South-east Asia as at Nov 15 at a nine-year low.
Robson Lee, partner at Kennedys Legal Solutions, said: “IPO sentiments across the region were adversely affected by dampened trade sentiments caused by currency fluctuations, high interest rates, regulatory arbitrage between markets, and geopolitical strife and its consequential uncertainty.”
