Spotlight on Singapore"s IPO market ahead of Mapletree launch

Spotlight on Singapore’s IPO market ahead of Mapletree launch
Posted: 18 February 2013 2319 hrs

 

 

 
 
 

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Spotlight on Singapore’s IPO market ahead of Mapletree launch

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SINGAPORE: The spotlight is on Singapore’s IPO market with Mapletree planning to launch a mega-deal on the Singapore Exchange.

As more companies try to tap funds from Singapore’s market, analysts warn that risks are still abound.

They also note that REITs with assets based in Singapore are more in favour.

Following a dismal 2012, hopes are high that a successful offering by the Mapletree Greater China Commercial Trust will restore interest in Singapore’s IPO market.

The REIT is expected to raise S$1.7 billion, and will be the Singapore bourse’s largest IPO in two years.

Singapore regulations stipulate that 90 per cent of profits from REITs must be distributed as dividends, making them a popular choice among investors.

And the response to this proposed listing is likely to be positive.

Robson Lee, Partner at Shooklin Bok, said: “Singapore REITs typically provide a yield of 6 to 7 per cent, and is considered a safe harbour investment. This particular REIT IPO has strong cornerstone investors in the form of Morgan Stanley, AIA Group. I would think the take-up rate would be very good because of the cornerstone investors.”

In 2012, there were 19 new listings on the SGX that collectively raised about S$3.2 billion in proceeds. Deloitte Singapore expects 20 to 30 new listings on the SGX this year.

Singapore’s stock market has had a bullish run in the past three months and some market watchers are optimistic about the growth of Singapore’s listing market for 2013.

But some caution that the worsening recession in the Eurozone and a potential global currency war could signal a correction in the markets, which would dampen investors’ confidence.

Daryl Liew, Head of Portfolio Management at Reyl Singapore, said: “When we look at other similar China REITS that have come to market, broadly speaking, many are still trading below the IPO price, those that have listed over the last two to three years. So on that note, some investors are concerned about REITS that have foreign assets because most of those REITS have struggled to do quite well.”

At the end of the day, experts say strong fundamentals and good prospects and sound management still underpin the success of any listing.

- CNA/de

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Spotlight on Singapore"s IPO market ahead of Mapletree launch