Seven new listings since end June, compared to three in first half of year
By Yang Huiwen 07 September 2009
The market for new listings is starting to stir again in the second half of the year, after a dismal first half which saw only three listings.
Taking heart from the spectacular rebound in equity markets globally, initial public offering (IPO) aspirants - companies wanting to issue common stock to the public for the first time to raise capital - are once again turning to the capital market to raise funds.
A total of seven IPOs have been launched since end June - more than double that of the first half year.
Lacklustre stock market conditions early this year had hit the market for new listings, as prospective issuers put their listing plans on the back burner.
Of the 10 IPOs so far this year, seven are trading above their IPO price, with only three - Japan Foods, Westminster and Latitude - below water.
Two recent debutantes stood out: PEC shares surged 80 per cent above its offer price of 40 cents on its trading debut, while Mary Chia shares were up 47.8 per cent on its first day of trade.
‘The IPO market will continue to be very robust, the reason being there is a lot of liquidity wanting to invest in Asia,’ said Mr. Philip Lee, JPMorgan’s chief executive and head of investment banking in South-east Asia. The Singapore Exchange (SGX), along with rival exchanges like Hong Kong, ‘falls in this category and will be a beneficiary of this’.
Dr Ernest Kan, head of Deloitte’s Global IFRS & Offerings Services Group, said: ‘There are some good signs in manufacturing activity, and the rebound in the stock market in recent months is also a positive trend.
‘There are definitely more inquiries compared to six months ago. Next year will definitely be a better year for IPOs,’ he added.
SGX said last month it is optimistic that there will be more listings. ‘Providing current market conditions prevail, we expect increased interest in new listings,’ CEO Hsieh Fu Hua said in a statement.
New listings have been dwindling since a bumper year in 2007, when a record US$5.3 billion (S$7.6 billion) was raised from 61 listings, according to Bloomberg data.
Last year, only 30 companies went public. The amount raised plunged about 77 per cent to US$1.21 billion.
Despite optimism that more IPO deals could be in the making, this year could go down as one of the worst years on record for IPO deal makers.
A check with the Monetary Authority of Singapore website showed that only four firms have registered their prospectuses, of which three are China-based. These could be launched later this year.
Ziwo Holdings, in the textile industry, was the latest to lodge its IPO prospectus on Aug 27, while Goodland Group registered its own on Aug 19.
Great Group Holdings and China Gaoxian Fibre Fabric Holdings lodged their prospectuses in June.
Sino Grandness Food Industry Group, a Singapore-based food supplier, withdrew its prospectus last month.
Valuations need to pick up first in order to attract more companies to list here, said Dr Kan. ‘The key issue is where do you get these IPO candidates,’ he said. ‘Success is yet to be seen in getting companies out of China’, which forms the bulk of foreign listings here.
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Local IPO market stirring back to life
Seven new listings since end June, compared to three in first half of year
By Yang Huiwen
07 September 2009
The market for new listings is starting to stir again in the second half of the year, after a dismal first half which saw only three listings.
Taking heart from the spectacular rebound in equity markets globally, initial public offering (IPO) aspirants - companies wanting to issue common stock to the public for the first time to raise capital - are once again turning to the capital market to raise funds.
A total of seven IPOs have been launched since end June - more than double that of the first half year.
Lacklustre stock market conditions early this year had hit the market for new listings, as prospective issuers put their listing plans on the back burner.
Of the 10 IPOs so far this year, seven are trading above their IPO price, with only three - Japan Foods, Westminster and Latitude - below water.
Two recent debutantes stood out: PEC shares surged 80 per cent above its offer price of 40 cents on its trading debut, while Mary Chia shares were up 47.8 per cent on its first day of trade.
‘The IPO market will continue to be very robust, the reason being there is a lot of liquidity wanting to invest in Asia,’ said Mr. Philip Lee, JPMorgan’s chief executive and head of investment banking in South-east Asia. The Singapore Exchange (SGX), along with rival exchanges like Hong Kong, ‘falls in this category and will be a beneficiary of this’.
Dr Ernest Kan, head of Deloitte’s Global IFRS & Offerings Services Group, said: ‘There are some good signs in manufacturing activity, and the rebound in the stock market in recent months is also a positive trend.
‘There are definitely more inquiries compared to six months ago. Next year will definitely be a better year for IPOs,’ he added.
SGX said last month it is optimistic that there will be more listings. ‘Providing current market conditions prevail, we expect increased interest in new listings,’ CEO Hsieh Fu Hua said in a statement.
New listings have been dwindling since a bumper year in 2007, when a record US$5.3 billion (S$7.6 billion) was raised from 61 listings, according to Bloomberg data.
Last year, only 30 companies went public. The amount raised plunged about 77 per cent to US$1.21 billion.
Despite optimism that more IPO deals could be in the making, this year could go down as one of the worst years on record for IPO deal makers.
A check with the Monetary Authority of Singapore website showed that only four firms have registered their prospectuses, of which three are China-based. These could be launched later this year.
Ziwo Holdings, in the textile industry, was the latest to lodge its IPO prospectus on Aug 27, while Goodland Group registered its own on Aug 19.
Great Group Holdings and China Gaoxian Fibre Fabric Holdings lodged their prospectuses in June.
Sino Grandness Food Industry Group, a Singapore-based food supplier, withdrew its prospectus last month.
Valuations need to pick up first in order to attract more companies to list here, said Dr Kan. ‘The key issue is where do you get these IPO candidates,’ he said. ‘Success is yet to be seen in getting companies out of China’, which forms the bulk of foreign listings here.
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