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Strong start to year with Singapore firms raising US$816.9m in equity capital markets

SINGAPORE-based companies have raised US$816.9 million through equity capital markets (ECM) for 2018 to-date, the strongest start to a year since 2013, according to Thomson Reuters' preliminary first-quarter review of Singapore ECMs on Friday.

Amounts raised by such companies through initial public offerings (IPO), follow-on and convertible offerings, represent a 32.7 per cent increase in proceeds compared with the same period in 2017, while the number of ECM issuances grew 18.2 per cent from a year ago.

The increase in funds raised was driven by Singapore companies' IPOs in both local and foreign stock markets.

The four IPOs in 2018 to-date raised US$344.4 million, almost six times that raised by the three IPOs in 2017.

Sasseur Reit, the latest candidate looking to list in Singapore, is a real estate investment trust that offers exposure to Chinese outlet malls - a new asset class - to investors here.

It has launched a US$300.7 million Singapore Exchange (SGX) IPO in March and is the biggest Singapore equity offering so far this year, Thomson Reuters said.

However, funding raised through follow-on offerings from Singapore issuers raised US$240.2 million across seven deals thus far, a 56.8 per cent decline from US$556 million across eight deals in the comparative period last year.

In all, follow-on offerings accounted for 29.4 per cent of Singapore ECMs so far this year, IPOs captured 42.2 per cent of the market in terms of proceeds, and convertible offerings made up the remaining 28.4 per cent, Thomsons Reuters said.

HSBC leads Singapore ECM underwriters with US$232.3 million in related proceeds, capturing 28.4 per cent of the market. DBS Group is in second place, with a 14.6 per cent market share.

Across all sectors, ECM issuance in the real estate sector accounted for the majority of ECM activity in terms of proceeds, with a 92.3 per cent market share. The sector raised US$753.7 million so far in 2018, up 48.5 per cent from the first quarter of 2017.

Thomson Reuters said that the growth was driven by Reits and business trust issuance such as Sasseur Reit's IPO, and follow-on offerings from Frasers Commercial Trust (US$76.5 million) and Ascendas India Trust (US$75.7 million).

The consumer products and services sector, the second-largest contributor, accounted for just 4 per cent, raising at least US$32.8 million in proceeds this year, a significant increase from 2017.

Fees for the underwriting of equity deals issued by Singapore-owned companies totalled US$12.1 million in 2018 to-date, up 5.8 per cent compared with the same period last year. Since the start of the year, DBS Group earned the most among underwriters with fee revenues of US$2.9 million or a share of 24 per cent.

Singapore-listed equity offerings, which consist of IPOs and follow-on offerings, totalled US$1.5 billion so far this year, more than double the proceeds in the first quarter of 2017.

Follow-on offerings raised US$1.2 billion in proceeds in the year-to-date, making it the the strongest start to a year for Singapore-listed equity offerings since 2013. Among these offerings, South Korean messaging app operator Kakao was the biggest, raising US$1 billion from the sale of global depository receipts. Meanwhile, IPO listings raised US$315.6 million.