Singapore IPO market: Why proceeds fell by 95% in 1H23

IPOs in 1H23 raised $28m.

Proceeds raised through initial public offerings (IPOs) in Singapore nosedived in the first half of 2023, falling 95% YoY to $28m.

Data from Deloitte showed that Singapore only had three IPOs in 1H23, namely, YKGI Limited ($19.80m), Ever Glory United Holdings Limited ($3.08m), Pasture Holdings ($5m), and LYC Medicare Singapore Limited. In 1H22, the Lion City saw nine IPOs and raised $572m.

Market capitalisation likewise fell year-on-year, dropping by 83% to $137m in 1H23 from $790m in 1H22. The number of new IPOs also fell by 67%, said Deloitte.

The expert also noted that there was the absence of Real Estate Investment Trusts (REITs) and Special Purpose Acquisition Companies (SPACs) listings in 1H23.

The most recent REIT listings were Daiwa House Logistics and Digital Core REIT in 2021, whilst SPAC listings cooled since the subsequent listing of three SPACs in January 2022.
Deloitte underscored that the most recent listing of REIT occurred before the announcement of the first interest rate hike of the Federal Reserve in March 2022.

“Recently, in June 2023, the Fed paused further rate hikes for the quarter but it is anticipated that there will be two hikes by the end of the year,” Deloitte said.

“As such, REIT aspirants would have to factor in these increased borrowing costs which might postpone listing plans. We expect the REIT trend to come back once interest rates stabilise,” the expert added.