Total funds raised via IPO skyrocketed to a four-year high

Amount doubled to $4.7b versus 2016's $2.3m.

The year 2017 ended with a good showing for the Singapore Exchange (SGX), with total funds raised through Initial Public Offerings (IPOs) being the highest in the past four years. PwC’s Equity Capital Markets Watch found that total funds raised in 2017 amounted to S$4.7 billion, double that of 2016 at approximately S$2.3 million.

The SGX saw a total of 20 IPOs with seven listings on the Mainboard and 13 listings on the Catalist Board in 2017. SGX also welcomed the listing of NetLink NBN Trust, which raised approximately S$2.4 billion in gross proceeds, making it the largest IPO listing that the Singapore equity capital market has seen in six years.

Tham Tuck Seng, Capital Markets Leader at PwC Singapore, said, “The year 2017 has been a brilliant one for IPOs in Singapore. With the market upturn, we see that Real Estate Investment Trusts (REITs) and business trusts (BTs) continue to dominate the market making up 88% of total funds raised.”

Last year (2017) saw a total of 30 follow-ons (FO), which raised a combined gross proceeds of approximately S$3.0 billion. FO performance in Singapore for 2017 was dominated by REITs and BTs, accounting for 81% of total FO funds raised the entire year. A total of 12 REITs and BTs from this sector engaged in FO activities in 2017, an increase from 2016 which saw 10 REITs and BTs engaged in FO activities.

Most of the funds raised by these REITs and BTs are expected to be used for the acquisition of new assets and the repayment of existing borrowings. In addition, rising interest rates are also causing debt financing to become increasingly expensive. It is therefore not surprising that real estate players are tapping on the equity market to finance new acquisitions and pare down their borrowings level.