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Sizeable mainboard listings expected on SGX in H2: Deloitte

SIZEABLE mainboard listings are expected on the Singapore Exchange (SGX) in the second half of the year, with the companies coming from the service sectors, said Deloitte. But this is subject to market performance and geo-political factors that will impact the economy.

Tay Hwee Ling, global IFRS (International Financial Reporting Standards) & offerings services leader at Deloitte Southeast Asia and Singapore, in a media statement for a study entitled Singapore IPO (initial public offering) capital market 2019 mid-year report, said that the SGX could be a listing destination for IPO aspirants.

Ms Tay said: “While the Hong Kong Stock Exchange (HKEx) continues to be attractive due to the perceived high valuation, the reality of factors such as the recent high rejection rates, lower subscription rate for IPOs and increasing professional fees are being felt. These sentiments suggest that businesses seeking to list in Hong Kong may consider SGX instead."

She expects sizeable mainboard listings coming onto the SGX in the next six months, as there is a pipeline of domestic and cross-border IPOs from companies in the service sectors.

Also, SGX’s partnerships with Nasdaq and Tel-Aviv Stock Exchange forged in recent years have also created opportunities for companies in the technology and healthcare sectors to co-list in these exchanges, giving these companies access to global networks and capital markets as they progress with their expansion plans, Ms Tay said.

Through partnerships like these, SGX is in a position to support high-growth tech companies from around the world, while broadening investment options for investors and adding to the vibrancy of Singapore’s capital market.

But Singapore is subject to global economic disruption and uncertainties. Global factors including the risk of a hard Brexit, the ongoing United States-China trade war, the upcoming US elections in 2020, as well as macroeconomic and political conditions in South-east Asia will be the key factors impacting the Singapore capital markets for the rest of the year.

Singapore saw nine IPOs totalling S$1.55 billion raised and these had a market capitalisation of S$2.24 billion in the first six months of 2019.

This is a 182 per cent increase over S$548 million raised from seven IPOs in the first half of 2018.