The Singapore initial public offering (IPO) scene paled compared with other Asian nations in the second quarter of 2010, according to the recent global IPO study conducted by accounting firm Ernst and Young.
For the second quarter ended 30 June 2010, the Singapore Exchange attracted six IPOs from local and foreign companies with a total capital increase of US$600 million ($834.6 million).
Meanwhile, the Asia-Pacific market accounted for 56 percent of the global IPO market, which raised about US$26 billion from 168 deals. Hong Kong and China led the superb performance with 110 IPOs worth US$16 billion.
Several analysts expect the number to go up with the upcoming IPO of Agricultural Bank of China on the Hong Kong and Shanghai bourses. The deal is likely to raise US$23 billion.
Out of the six firms that went IPO on SGX in Q1, four are local firms that raised US$400 million. It was rather low compared to the six local companies that went IPO in the previous quarter which raised US$500 million.
The lacklustre market performance in Q2 led Courts Asia and Chinese shipbuilder New Century to withdraw their listings.
Despite the market uncertainty and volatility, analysts are still upbeat about the prospects of the IPO market in H2 2010.
"The second half looks more upbeat as companies seek to raise funds in line with economic expansion, and with recent reports that more sizeable foreign companies may be seeking a listing on the SGX," said Mr. Max Loh, Ernst and Young’s Assurance Partner and Singapore IPO Leader.
Almost 301 IPOs were released worldwide in Q2, up eight percent from Q1, but the amount of money raised dropped 12 percent on-quarter to US$46.1 billion.
The research added that many of the deals came from growth industries, including the energy, technology and healthcare sectors.