A recent study by credit, macro and industry expert Fitch Solutions may hint towards Singapore’s IPO market to remain unsteady in the months to come as the number of delistings in SGX continue to outnumber the volume of new listings.
It stated: “We forecast the continuation of a worrying trend which is seeing a steady flow of public-to-private delisting deals on the Singapore Stock Exchange (SGX). This is bad news for both the IPO arena and local ECM more broadly,” the report said.
“Furthermore, we note that while Singapore could stand to prosper from the ongoing trade tensions between the world’s two largest economies which will catalyse an increasing flow of companies from the Chinese Mainland opting for a floatation deal outside of the US, we put the Hong Kong Stock Exchange (HKEX) in a prime position to benefit from the potential upside,” it added.
According to the report, while the STI’s 2019 performance may appear impressive at first, zooming out from the headline numbers suggests that the rebound has merely come from a low base to return to more historically average levels.
“In our view, the same can be said for new listing activity in the SGX. Last year (2018) was an exceptionally slow year for floats and saw just four deals which raised over USD100mn,” it closed.
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