NetLink makes tepid SGX debut, more Singapore IPOs in pipeline

Photo: NetLink Trust website

NetLink NBN Trust units closed steady at their offer price on Wednesday, although analysts said the muted debut was not a surprise given the large size of the listing and that the outlook for Singapore’s IPO market remained positive.

The city-state has been previously pegged as the likely hot spot for IPOs in Southeast Asia in 2017 with sales of stakes in business and real estate investment trusts (REITs), as volatile currencies and weak investor sentiment curb deals elsewhere.

The $1.7 billion NetLink IPO, the largest in Singapore in four years and which has propelled listings in the country in terms of money raised to a multi-year high, is a shot in the arm for the Singapore Exchange (SGX) that has been trying to attract more big-ticket IPOs.

SGX is encouraged by the larger transactions done for this year and the potential listings due later this year, its head of equities and fixed income, Chew Sutat, said.

“We have already exceeded the total primary and secondary funds raised from last year. Beyond the REITs and business trusts, the consumer and healthcare sectors continue to do well,” he told Reuters.

In recent years, SGX has become an attractive destination for companies to list their global assets by way of REITS or business trusts, as yields of as much as 6-7 percent draw in strong participation from retail and institutional investors amid relatively low interest rates.

Australia’s Cromwell Property Group is aiming to launch a more than $1 billion Singapore REIT IPO later this year and has hired three banks so far, financial sources said.

The REIT will include a portfolio of European offices, industrial and office assets, giving investors access to a large European footprint. Cromwell declined to comment.

Following the NetLink offering, the total amount raised via IPOs in Singapore this year has already hit about $2 billion, Thomson Reuters data shows.

That is more than last year’s $1.7 billion and the highest since at least 2014 when companies raised $2.56 billion.

NetLink, the broadband unit of Singapore Telecommunications (Singtel), had offered 2.9 billion units in its IPO, at S$0.81 apiece, raising about S$2.3 billion.

The offering had been priced at the lower end of its indicative S$0.80-S$0.93 range.

“As a business trust, the future cashflow is predictable, so there is a lack of imagination on this kind of IPO,” said Margaret Yang, a market analyst at CMC Markets, Singapore.

Analysts said the size of the IPO had lowered the possibility of a price surge on the first day.

According to Thomson Reuters data, the NetLink IPO is the biggest since Mapletree Greater China Commercial Trust’s 2013 offering raised $2.06 billion.

NetLink rose to S$0.815 per unit before closing at S$0.810. Singtel owns 24.99 percent ofNetLink after the IPO.

Singapore is a major financial centre but the city-state’s only stock exchange has long experienced low trading volumes and weaker valuations compared with Hong Kong, which in turn has been a deterrent for companies seeking IPOs.

To counter this, the bourse is considering several measures, including looking at whether it should introduce dual-class share listings.

Also Read:

Singapore: Netlink NBN Trust launches $1.66b listing on SGX

APAC IPOs recover in H1 2017, with strong SGX rebound

Singapore Exchange IPO pipeline looks strong: Mohamed Nasser Ismail, SGX

Reuters 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.