Singapore’s IPO scene under threat from US, Australia

In 2023, homegrown firms such as Simpple and Ohmyhome chose to list in the US.
 
On many levels, Singapore and Hong Kong have been fierce competitors more so this year in the IPO scene. Experts, however, suggest that Singapore shifts its focus to emerging challengers: the United States and Australia.
 
In 2023, the United States saw the listing of Singapore-based companies such as Simpple and Ohmyhome. Other homegrown firms like Grab and PropertyGuru are also listed in the US.
 
“If an entity wants to list totally outside of China, then there’s no need to compete with Hong Kong, because obviously, Hong Kong is very much tied to China,” CLA Global TS Holdings Group CEO and Chief Innovation Officer, Henry Tan, told the Singapore Business Review.
 
Tan said there are two main reasons why some potential IPO entrants in Singapore are going to the US and Australia: valuation and volatility.
 
One way to increase Singapore’s market valuation is by targeting companies in Southeast Asia, rather than Korea and China.
 
“If it’s an ASEAN firm, for example a Thai, Philippine, or Malaysian company, coming to Singapore Exchange it will be seen as an upgrade, but if you will target Chinese companies, it most likely be seen as a downgrade to come [in Singapore] in terms of valuation,” Tan explained.
 
“I would prefer that [Singapore] target more of regional play, and then make the Singapore Exchange truly an ASEAN platform, a platform for capital in Southeast Asia,” Tan added.
 
In 1H23, proceeds raised through initial public offerings (IPOs) in Singapore nosedived, falling 95% YoY to $28m (US$20.39m).
 
Data from Deloitte showed that Singapore only had three IPOs in 1H23, namely, YKGI Limited ($19.80m=US$14.42m), Ever Glory United Holdings Limited ($3.08m=US$2.24m), Pasture Holdings ($5m=US$3.64m), and LYC Medicare Singapore Limited. In 1H22, the Lion City saw nine IPOs and raised $572m (US$416.57m).
 
Market capitalisation likewise fell year-on-year, dropping by 83% to $137m (US$99.78m) in 1H23 from $790m (US$575.40m) in 1H22. The number of new IPOs also fell by 67%.