Equity capital market activity hits two-year high at US$3.8b YTD

Follow-on offerings outpaced IPOs and convertibles in proceeds.

Singapore’s equity capital market (ECM) has been abuzz with activity after companies have raised US$3.8b in the first nine months of 2018, according to Thomson Reuters.

The expansion in proceeds represents double-digit growth of 10.4% that are also the highest since 2016. This could be attributed to a robust quarterly ECM performance in Q2 which hauled in US$2.34b but lost some of its momentum in the coming quarter.

“During the third quarter of 2018, Singapore ECM activity declined as proceeds reached US$533.4m, a 77.2% sequential decrease from a strong second quarter in 2018 (US$2.34b), and down 77.0% in proceeds compared to third quarter of 2017 (US$2.32b),” observed Thomson Reuters.

In terms of issuances, the number of issuances rose 33.3% YOY to 52 in the first nine months of the year.

In a breakdown, follow-on offerings accounted for the lion’s share of ECM proceeds (63%). This was followed by convertibles which managed to snap up 19.4% market share thanks to Sea Ltd’ US$500m proceeds from a five-year convertible bond in June which has snagged the title as the largest equity offering so far in 2018.

IPOs fell behind its ECM peers after accounting for the least market share in the ECM pie at 17.6% from Q1 to Q3 2018.

Also read: Singapore IPOs lag Asian peers as homegrown companies rush to list abroad

DBS Group leads the ranking for Singapore ECM underwriting with US$931.4m in related proceeds, capturing almost a fourth (24.5%) of the market share. Goldman Sachs follows behind in second place with 16.1% market share and Citi with 12.5%.