IPO Market Saw Fewer Deals But Higher Proceeds In 2019

Singapore was a small dot amidst a bleak global landscape for initial public offerings (IPO) in 2019, as total proceeds rose over fourfold to $3.13b from 2018’s $730m. The number of IPOs dipped to 11 from 15 in the previous year, according to PwC Singapore.

Four REITs continued to support the majority of IPO activity and contributed a whopping 98.1% ($3.07b) to the total proceeds raised during the year. To date, REITs have contributed 87% of total IPO funds raised over the past five years.

Three newly-listed REITs had portfolios comprising assets mainly located in the US: ARA US Hospitality Trust has 38 upscale hotels; Eagle Hospitality Trust has 18 hotels; and Prime US REIT focuses on office buildings in the country.

Majority of the new listings were winners in terms of performance. In terms of firstday closing performance, seven out of the 11 IPOs closed above IPO price whilst three went below, showing similar results to 2018. According to PwC, these companies have reported positive earnings results despite the macroeconomic challenges.

TrickeStar Limited topped the spot for both first-day closing performance with 35% gains. Although its headquarters is in Kuala Lumpur, the key focus markets are in the US and Canada. “The main driving force of the share price’s increase can be a result of individual management share purchase from the market,” said Tham Tuck Seng, capital markets leader at PwC Singapore.

Reclaims Global rebounded from worst performer with a 36% loss on day one trading to a positive of 8% gains YTD 2019 on the Catalist Board. “Its key market is public sector construction projects in Singapore, eyeing for the growth in major infrastructure demand locally. The company has posted improved results than prior periods, supporting its share to higher prices,” Tham said.

The bourse also had its fair share of losers. Alliance Healthcare Group Limited, with key business segments of providing healthcare solutions and General Practitioner clinics, saw