Singapore Exchange Limited (SGX: S68) is in a unique position.
While interest in its commodity and currency derivatives is up 42.1% year-on-year for fiscal 2024 (ending June 30, 2024), the cash equities market is struggling.
The total traded value dropped 4.2% to S$263.7 billion, with traded volume falling 2.5% to 341.4 billion shares, mainly due to low initial public offerings (IPOs).
In the first half of 2024, only one company listed on SGX, making Singapore the weakest IPO market in Southeast Asia.
Dry Spell for IPOs
SGX is experiencing a rare IPO dry spell this year with only one new listing, the Singapore Institute of Advanced Medicine (SGX: 9G2), raising just US$20 million.
In contrast, Malaysia had 21 IPOs raising nearly US$450 million in the same period.
Despite grants and incentives from the Monetary Authority of Singapore (MAS), many companies opted to list in the U.S. instead.
Some Hope
There is potential for more IPOs. Food Innovators Holdings (SGX: KYB) recently launched an IPO on SGX’s Catalist Board. Goodwill Entertainment has also filed for a listing.
SGX CEO Loh Boon Chye mentioned a “healthy pipeline” of companies preparing for potential listings.
Looking Ahead to 2025
More listings may come in 2025, with potential big names like Japan’s NTT considering a data centre REIT worth up to US$1 billion.
Thai Beverage’s beer unit IPO could occur in the third quarter of 2025, along with a possible US$500 million IPO from Neon Group.
MAS Task Force Initiated
MAS has formed a task force to improve market liquidity and boost IPOs, exploring measures like further incentives and streamlining the listing process.
What’s Next?
SGX’s IPO market may improve if the government and MAS take effective actions. This could lead to better valuations and liquidity, providing more investment opportunities.
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Disclosure: Royston Yang owns shares in Singapore Exchange Limited and NetLink NBN Trust.
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