Singapore IPO market outlook improving, but no quick fix in sight

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A man wearing a face mask walks past the Singapore Exchange (SGX) which remains open during “circuit breaker” measures to curb the COVID-19 coronavirus) in Singapore’s central business district, April 7, 2020. REUTERS / Edgar Su

SINGAPORE, Sept. 22 (Reuters) – Singapore’s decision to launch new funds to support startups will help companies looking for IPOs, though it could be years before the Singapore Exchange (SGXL.SI) fails becomes a regional technology rating center, according to market players.

Despite touting itself as one of Asia’s major financial centers, Singapore has seen a decline in listings over the past decade and failed to attract large initial public offerings.

Market players say, however, that the creation of two funds with a capital of S $ 2 billion ($ 1.5 billion) for fundraising and corporate IPOs, coupled with the authorization of listing of blank check companies in the city-state, attracting more startups to register.

“The value proposition of the Singapore ecosystem to founders and shareholders of high growth companies is that it will be part of the company’s journey – before, during and after the IPO,” Ho Cheun said. Hon, responsible for actions in Southeast Asia. capital markets at Credit Suisse.

“This should resonate with some founders and entrepreneurs, especially the unicorns who are starting to think about public listings.”

The city-state has a long way to go.

So far this year, through September 16, only three companies were listed on the Singapore Stock Exchange (SGX), raising $ 239 million, according to data from Refinitiv. The amount raised is less than half the figure for the same period last year and the lowest level in six years.

By comparison, funds raised on the Malaysian stock exchange amounted to $ 531 million, the Indonesian and Philippine stock exchanges each attracted $ 2.3 billion, while the Thai stock market exceeded $ 3.5 billion.

As tech deals in Southeast Asia explode, Singapore is looking to gain more attention after some large companies have chosen to list elsewhere in recent years.

Singapore-based games and e-commerce company Sea (SE.N) listed in the United States in 2017, for example, is now valued at $ 182 billion. Southeast Asian rideshare and delivery company Grab is also listed in the United States, through a blank check company, while games company Razer debuted in Hong Kong in 2017.

Vinnie Lauria, founding partner of Singapore-based Golden Gate Ventures, praised the government’s attempts to foster startup success.

“This is another example of Singapore using capital and smart government programs to market itself as the hub for Southeast Asian startups. “

Robson Lee, partner at Gibson, Dunn & Crutcher LLP law firm, said the Singapore market has the potential to “move beyond its lightness by being better organized and coordinated to attract unicorns and global high-tech companies.”

($ 1 = 1.3507 Singapore dollars)

Reporting by Anshuman Daga; Editing by Pravin Char

Our Standards: Thomson Reuters Trust Principles.

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