Where have all the IPOs gone?

There were no new Mainboard listings this year.

This has been a bad year for Singapore’s equity markets. There were absolutely no new listings on the Mainboard in 2015, after several high-profile initial public offerings (IPOs) were cancelled due to weak market sentiment.

According to a report by Deloitte, would-be fundraisers in Singapore have been deterred by a wave of global equity market volatility as well as heightened economic troubles in China and other large developing countries.

Apart from these macroeconomic headwinds, potential fundraisers are also deterred by the difficulty of getting a good valuation in Singapore.

“In our course of advising IPO aspirants, we have observed that getting a good valuation in Singapore is challenging,” said Dr Ernest Kan, Deloitte Southeast Asia Leader for Global IFRS and Offerings Services.

Share valuations at IPO, a yardstick typically used by banks to decide how much a company is worth – have remained challenging for some years now versus perceived stronger valuations elsewhere in the region.

“If valuation is believed to be a key factor, this tends to draw IPO aspirants’ decision to list in these other countries a more compelling one. That said, Singapore remains an attractive listing destination for both foreign and local companies, viewed as an efficiently regulated marketplace together with the presence of a large community of international fund managers and investors,” Dr Kan added.