Local IPO market tumbles as REIT listings vanish

There were no IPOs in Q1.

Singapore’s once-robust initial public offering (IPO) market is drying up as REIT listings vanish. Data from Thomson Reuters show that there were no new listings on the local bourse in the first quarter, compared to at least five Singaporean IPOs in the first three months of 2014.

Analysts attribute the IPO dearth to the disappearance of REIT listings. According to Goh Han Peng and Terence Wong of RHB, REITs and Business Trusts dominated listings in past years, while small caps dominated listings in other sectors.

“In recent years, the larger listings in SGX were primarily from the REIT/Business Trust space, an area that Singapore has carved a strong niche in. However, beyond this segment, there have been few major listings. Most of the listings outside of the REIT sector were primarily in the small caps space,” they stated.

Apart from vanishing REIT listings, the IPO scarcity could also be attributed to shrinking valuations on the local bourse.

“Depressed valuations on the local bourse caused some business owners to rethink the merits of keeping a listing status, and some took the privatisation/delisting route, while others became takeover targets. The most recent takeover of Keppel Land by its parent Keppel Corp is a prime example. Soon, a bluechip property counter will delist and become history,” they noted.