Global IPOs in first 9 months outstrip 2016's full-year tally

Singapore

THE global market for initial public offerings (IPOs) is buoyant - the number of listings and amount raised in the first nine months of this year alone have already surpassed that for the whole of 2016 on both counts.

There were 1,156 IPOs between January and September, 59 per cent more than in the corresponding period last year; these 1,156 IPOs raised US$126.9 billion, 55 per cent more than in the year-ago period.

Data in the latest EY (Ernst Young) Global IPO Trends: Q3 2017 report also showed that megadeals worldwide were back with a bang in the current quarter. The report, which examines the IPOs that took place through the first three quarters of the year, noted that 10 deals that busted the US$1 billion mark catapulted stock exchanges in Brazil, Singapore, Switzerland and India into the world's top 10 by capital raised, behind the Shanghai and Hong Kong bourses.

The proportion of cross-border deals went up each quarter this year by both deal number and capital raised, exceeding the full-year 2016 levels. The Asia-Pacific continued to lead the charge in IPO activity, both by number of deals and proceeds, and accounted for 65 per cent of IPOs across the world and nearly half the global capital raised.

However, the pace of listings in the region in Q3 2017 failed to match that in the previous quarter. The total number of deals fell by 4 per cent.

In the first nine months of this year, there were 690 IPOs in the Asia-Pacific. Altogether, they raised US$53.9 billion, cementing the region's status as the world's most active for new listings.

Five of the world's 10 most active stock exchanges by number of IPOs and four by proceeds in the year to date (YTD) were in the Asia-Pacific.

Topping the list were mainland China exchanges, which hosted 353 IPOs in the first nine months of the year. They were followed by the stock exchanges in Hong Kong, Australia, Japan and South Korea.

Ringo Choi, EY Asia-Pacific IPO leader, said Hong Kong remained the preferred hub for cross-border listings in the Asia-Pacific, and that other exchanges in the region were underpinned by their strong domestic listings. "In the longer term, solid economic fundamentals, plus government action to support markets and economies in countries like China, Singapore, Australia and Japan should keep listings strong. However, tensions in the Korean peninsula could create bumps in the IPO road ahead," he added.

The Asia-Pacific also performed strongly in terms of megadeals in Q3 2017, snagging four of the top 10 listings by proceeds and eight of the top 20. This included this quarter's largest IPO in the Asia-Pacific, and the second-largest listing globally - that for Singaporean telecommunications company NetLink NBN Trust.

The listing raised US$1.7 billion on the Mainboard of the Singapore Exchange (SGX) in July and was over-subscribed by 100 per cent, emphasising the demand for good-quality IPOs at the right price.

EY's Global Trends report noted that this was Singapore's largest IPO in six years. SGX had three other IPOs in July - one on the Mainboard and two on Catalist.

The 13 IPOs in the first nine months of 2017 were, however, two fewer than the 15 that took place over the corresponding period last year.

Twelve of the 13 new listings that started trading by mid-September registered positive first-day returns.

There has been at least one IPO from the real-estate sector in each of the first three quarters of 2017.

The report observed that SGX has enjoyed growing success in attracting cross-border listings of South-east Asian companies; these have included the IPOs of Malaysian property development group Aspen (Group) Holdings and Shopper360 Ltd, a Malaysian provider of shopper marketing services which listed in June. The cross-border IPO trend is expected to continue.

Max Loh, EY South-east Asia and Singapore IPO leader and the Asean and Singapore managing partner at Ernst & Young LLP, said SGX remained an appealing equity springboard for South-east Asian companies that "enjoy robust fundamentals and proven business models". "We expect a growing number of listings by fintech and technology-based businesses, supplementing a strong historical pipeline of companies from the property, consumer and industrial sectors."

The doubly subscribed listing of NetLink NBN Trust in July underscored the Exchange's attractiveness and capacity to achieve successful IPOs, he said.