Thursday, March 31, 2016

Singapore toppled as king of Southeast Asia's IPOs

Singapore’s reign as the premier destination for initial public offerings in Southeast Asia has come to an end.

The city-state’s exchange had the smallest haul of new share sales among the region’s four largest stock markets in 2015. Listings this year on Southeast Asia’s biggest bourse have totalled US$34 million ($46 million), lagging Thailand and Malaysia.

Singapore’s slide down the IPO rankings reflects not so much its own failings, but the growing ability of rivals from Jakarta to Bangkok to convince local issuers to stay at home instead of flocking to the regional hub. Indonesia, which has Southeast Asia’s biggest population and largest economy, plans to start an exchange dedicated to young technology companies, while Thailand’s premier has highlighted the importance of the country’s capital markets.

“The smaller Southeast Asian exchanges have been promoting themselves as a listing venue,” said Pankaj Goel, co-head of Southeast Asia investment banking at Credit Suisse Group AG. “It makes sense for Indonesian companies to list in Jakarta and for Thai companies to list on Thailand’s stock exchange.”

Singapore’s decline in new listings adds to the challenges faced by Boon Chye Loh, who became chief executive officer of the city’s exchange in July and has been trying to restore confidence in a market where turnover hasn’t recovered from a mystery penny-stock crash in 2013.

Companies that listed last year in Singapore raised US$366 million, according to data compiled by Bloomberg, its worst performance since 2001. The amount was less than 10% of funds raised from Thailand’s IPOs, just a third of Malaysia’s and half of Indonesia’s, the data show.

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