Singapore Exchange : Reports $74 Million Profit

AFTER a poor first half-year in initial public offerings (IPOs), the Singapore Exchange (SGX) is expecting a more exciting second half, with a few billion-dollar deals in the pipeline.

While the exchange had seen only seven IPOs on both its mainboard and Catalist in the first six months of the year, there had been five in July alone - JB Foods, IHH Healthcare, and Ascendas Hospitality Trust on the mainboard, and Neo Group and Sincap Group on the Catalist.

This month, the Catalist has seen one IPO by Sysma Holdings, while Far East Hospitality Trust is expected to make its mainboard trading debut on Monday next week. The listing could raise up to $717.6 million, assuming an over-allotment option is exercised.

And taking into account the amount attributable to the sponsor stapled securities, the managers intend to raise gross proceeds of up to $1.49 billion.

The success of recent IPOs have been encouraging, said SGX CEO Magnus Bocker.

" We've seen a lot of investor interest into those IPOs...That's a healthy sign, and it's encouraging a lot of other companies to come to the market. We see a growing interest for IPOs in Singapore - the pipeline is very healthy."

Mr Bocker added that there are regional and local companies of " very good sizes" which would need to raise funds for investments.

" It's a question of timing for many of them," he said, adding that investor sentiment in Singapore is steered not by the domestic market but by macroeconomic factors.

SGX has had its hopes dashed earlier this year when it lost football club Manchester United's IPO to the New York Stock Exchange. Another high profile offering by Formula One has also ground to a halt in the face of volatile market conditions. Other listing plans that have been put on hold include M& L Hospitality Trusts and Noble Group's agricultural arm Noble Agri.

At the same time, neighbouring stock market Bursa Malaysia has been catapulted into the limelight with the world's second and third largest listings in Felda Global Ventures and IHH Healthcare respectively.

Said Mr Bocker: " I'm very happy to see that Malaysia has had a couple of really big and well-supported IPOs...It creates a better sentiment for investors to come into the market."

Among SGX's pipeline of listing hopefuls are business trusts. Some of these reportedly include Malaysian-controlled Berjaya Sports Toto, which will list its lottery business in a $2.4 billion deal, and the aircraft leasing unit of asset management firm Investec, which wants to launch a US$800 million listing.

About $3.37 billion has been raised on SGX this year. This compares with $9.02 billion for the same period last year, which came largely from Hutchison Port Holdings Trust's US$5.5 billion listing - the largest IPO in Asia last year - and Mapletree's Commercial Trust's S$893 million IPO.