Equity Capital Markets Watch

Singapore, H1-2022 Review

Singapore IPO activities

The Singapore IPO market performance for H1-2022 was considerably up compared to the corresponding period last year. The number of new IPO increased from 3 in H1-2021 to 10 in H1-2022. Total funds raised also increased from S$0.34 billion in H1-2021 to S$0.57 billion raised in the same period this year (Exhibit 1).

After the launch of the new regulatory framework for SPAC listing on the Singapore Exchange (SGX) effective 3 September 2021, SGX welcomed the listing of the first three Special Purpose Acquisition Companies (SPACs). These newly listed SPACs managed to raise a total IPO proceeds of approximately S$528 million.

The listing of Vertex Technology Acquisition Corporation on the SGX Mainboard marked the largest local IPO in H1-2022, with the company raising S$208 million. This highlights a positive trend of SPAC IPOs successfully making their debut on the SGX Mainboard.

SGX has also welcome the secondary listing of NIO Inc, a global smart electric vehicle company, and the first company in the world to be listed on three exchanges – US, Hong Kong and Singapore.

Exhibit 1: IPO fund raised and number of IPOs (1 Jan 2022 - 18 June 2022)

_{Source: SGX, as on 18 June 2022, excluding RTO and secondary listing.}

Strong H1-2022 Singapore IPO activity despite global economy situation

Exhibit 2: Top 5 IPOs from 1 Jan 2022 to 18 June 2022

Vertex Technology Acquisition Corporation

S$208m

Asset and wealth management - SPAC

Pegasus Asia

S$170m

Asset and wealth management - SPAC

Novo Tellus Alpha Acquisition

S$150m

Asset and wealth management - SPAC

Alpina Holding

S$11.4m

Construction and engineering

5E Resources Limited

S$10m

Industrial services

_{Source: SGX, as on 18 June 2022, excluding RTO and secondary listing.}

The global economy of the first half year of 2022 has faced diverse negative risks such as the war in Ukraine, supply chain disruptions, a tight labour market, persistently high inflation, central bank tightening and the enduring impacts of the pandemic that impacted ordinary markets and global growth. It is evident that in the last months investors have become more selective and price sensitive, however the Singapore IPO activity in the first half year of 2022 has continued at a strong pace, achieving the busiest half year in the last five years in terms of IPO volume.

Singapore IPO trends - Singapore IPO activity since 2017

Exhibit 3: Singapore IPO activity of the first half years since 2017

_{Source: Dealogic for data from H1-2017 to H1-2021 and SGX for data of H1-2022 as on 18 June 2022, excluding RTO and secondary listing.}

IPO volume on SGX in H1-2022 was the highest since H1-2017 (Exhibit 3). However, the funds raised by the listings in H1-2022 were lower than those raised in the half year of 2019 and 2020 (Exhibit 3). This is due to higher funds raised by REITs in the previous years.

Singapore IPO trends - Emerging SPAC market in Singapore

Exhibit 4: Global SPAC IPO activities

SPAC IPOs stalled globally in the first half year of 2022. SPACs are facing increased challenges due to declining investor sentiment and proposed new regulations, particularly from the SEC which announced at the end of the first quarter 2022 rules to enhance disclosure and investor protection.

Globally, there were 69 SPAC IPOs, raising a total proceeds at $11.8 billion during the first half of 2022. Locally, the 3 newly listed SPAC managed to raise a total proceeds of S$528 million - Vertex Technology Acquisition Corporation (VTAC), Pegasus Asia and Novo Tellus Alpha Acquisition with deal value of S$208m, S$170m and S$150m respectively.

Other regional bourses

Exhibit 5: IPO fund raised by countries (Jan 2022 - May 2022)

Country	Fund raised (US$'billion) Jan 2022 - May 2022	Fund raised (US$'billion) Jan 2021 - May 2021	Number of IPOs Jan 2022 - May 2022	Number of IPOs Jan 2021 - May 2021
Indonesia	1.27	0.15	21	8
Singapore	0.44	0.24	10	3
Malaysia	0.41	0.03	9	2
Thailand	0.22⁴	2.70	11	8
Philippines	0.19	1.37	3	2
Total	2.53	4.49	54	23

_{Source: Official stock exchanges websites, May 2022

⁴Fund raise (US$'billion) Jan 2022 - March 2022}

IPO activities of regional markets, such as Thailand, Malaysia, Indonesia and Philippines made a strong showing in H1-2022, with Indonesia and Thailand leading in terms of IPO proceeds raised and IPO volume (Exhibit 5).

The listing of GoTo Gojek Tokopedia Tbk (GoTo) on the Indonesian Stock Exchange (IDX) was the largest IPO on these regional markets, raising US$0.95 billion. GoTo is a technology company formed in 2021 between Indonesia’s two most valuable start-ups, ride-hailing giant Gojek and e-commerce firm Tokopedia.

The second biggest IPO on these regional markets, raising proceeds of US$0.24 billion, were the IPO of Farm Fresh Bhd on Bursa Malaysia. Farm Fresh is in the business of farming, manufacturing, and distributing various dairy products and plant-based products.

The IPO market in the Philippines saw a slight increase in IPO volume, however the funds raised in H1-2022 were considerably lower than in H1-2022. Citicore Energy REIT Corp was the largest IPO in the Philippines, raising US$0.1 billion.

“Although the geo-political and the rising interest rates environment create uncertainties, we expect IPO activities to further increase in H2-2022. We hope that new SPAC IPOs, de-SPACs, spin-offs and potential delisting of Chinese companies listed in the US will add variety and excitement to the local capital market scene.”

Tham Tuck SengCapital Markets Leader, PwC Singapore

The way forward - H2-2022

Local IPO pipeline contributing to Singapore issuance momentum in H2-2022
We expect capital markets activity in Singapore to continue growing in H2-2022. We believed SGX will continue to be attractive and a listing destination of choice for companies across niche sectors such as real estates, healthcare and consumer discretionary.
Potential delisting of Chinese companies listed in the US to further spur capital market activities in Singapore
The measures of the SEC and PCAOB to implement the HFCA Act may increase the risk of US listed companies with significant operations in China to exit the US capital markets. This may benefit the Singapore market and other regional stock exchanges as this risk might translate to increase interest of these US listed companies to seek for alternative fund raising platform.