Equity Capital Markets Watch

Overview of initial public offerings (IPOs) and follow-on (FO) activities

Global

Against the mixed macroeconomic backdrop, IPOs remained robust this year. There were a total of 2,684 IPO globally, raising US$611.7 billion in 2021. This is close to twice the number of IPOs and total funds raised globally in 2020.
United States, China and Hong Kong continued to dominate the global IPO market during this period, accounting for approximately 70% of the total global IPO proceeds raised this year.
The number of SPAC IPOs and the proceeds raised in 2021 was more than the combined SPAC IPOs and proceeds raised for the last 5 years.
In 2021, FO funds raised globally increased to US$825.3 billion from US$734.3 billion in the same period last year.

Singapore

Despite fewer IPOs completed on the Singapore Exchange (SGX) in 2021, 8 compared to 11 in 2020, the total IPO proceeds raised this year was S$1.7 billion, S$300 million more than in 2020, indicating Singapore’s readily available pool of investors and funds for high quality IPOs.
Digital Core REIT IPO in December 2021 was the largest SGX IPO this year. The data center REIT managed to raise around S$822 million (US$600 million) as it debuted on SGX Mainboard.
The number of FO deals in Singapore increased from 25 in 2020 to 36 in 2021. However, funds raised through FO deals in the country decreased from US$9.6 billion in 2020 to US$6.1 billion in 2021.
REITs and real estate developers continued to dominate FO activities in Singapore in 2021, accounting for approximately 70% of the total funds raised.

Performance of newly-listed companies in Singapore in 2021

Mainboard new listings

SGX welcomed three new mainboard listings this year, including two new REIT IPOs within a span of two weeks.

The IPO of Digital Core REIT was the largest IPO by fund raising in Singapore since the start of COVID-19. Digital Core REIT initial portfolio comprises 10 freehold data centres in the United States and Canada with a total appraised valuation of US$1.4 billion. The offering garnered strong investors’ interest and was subscribed 19.4 times. Daiwa House Logistics Trust, a REIT that invests in logistics and industrial real estate across Asia, also generated strong demand with its IPO subscribed 9.5 times.

The strong investors’ interest for both newly listed REITs demonstrated SGX attractiveness for quality REIT listings with diversified portfolios across different asset classes and with strong global footprints.

Catalist board new listings

There were five new IPO on the Catalist this year, raising a total of S$60.3 million. Trans-China Automotive was the largest IPO on the Catalist this year, managing to raise S$19.6 million during is debut in November 2021.

Notably, all five new listings on the Catalist were from a wide range of industries and most of these newly listed companies have operations that are predominantly located out of Singapore. This reinforces SGX’s position as an international exchange of choice and its ability to attract listings from different sectors.

Growing interest in Asia for SPACs

SGX announced the new SPAC Listing Rules on its Mainboard, effective 3 September 2021. It follows the public consultation paper released in March 2021 that received feedback from over 80 respondents, which according to SGX is possibly the highest response rate to any of its consultations in recent years.

The new listing framework enhances the reputation of SGX as one of the most progressive bourse in the Asia Pacific region and is expected to add the much needed vibrancy to Singapore’s capital markets. Being an early adopter of this alternative capital raising route within the Asian time zone provides SGX with the necessary ingredients to act as a platform for fast growing Asian companies.

HKEX has also followed suit and on 17 December 2021 announced the finalisation of its new regime for SPAC that will take effect on 1 January 2022. It has also been reported that Indonesia and Japan bourses are considering allowing SPAC listing to boost growth.

The advancement of the listing regime, allowing for SPAC listings on key Asian bourses, will provide target companies more options to choose from as they evaluate destinations to raise funds.

The road ahead: 2022

“Higher inflation, tighter monetary policies and global supply chain disruptions may create further volatility in the equity markets in 2022. Beyond these factors, increasing competition from the regional bourses may also affect local IPO activities next year. We, however, can still be cautiously optimistic about IPO activity in the coming year due to various recent initiatives launched to support our equity markets eco-systems”

Tham Tuck Seng, Capital Markets Leader, PwC Singapore