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The Star
a day ago
- Business
- The Star
Global issues cloud 2H25 IPO outlook
PETALING JAYA: The initial public offering (IPO) market, which started the year on a subdued note, faces an uncertain second half (2H25) as weak market sentiment, global headwinds and poor earnings season continue to dampen investor appetite. A market watcher says the outlook for IPOs in 2H25 hinges on several unresolved global issues – including the outcome of potential US reciprocal trade tariffs expected in July, US-China trade tensions and the timing of a US interest rate cut, if any. 'The market sentiment isn't good. Last year, about 80% to 85% of IPOs performed well post-listing. 'This year, it's the complete opposite – nearly 80% have traded below their offer prices,' Tradeview Capital chief executive officer and founder Ng Zhu Hann told StarBiz. 'So, what changed? Largely, to me, it is – of course – market fatigue, fund flows, and also because the global situation has made a lot of investors, whether local, institutional, foreign funds or even local retail investors, very risk-averse. 'A lot of people are holding on to their cash rather than participating in the equity market.' Domestically, Ng said a lacklustre corporate earnings season has added to investor caution. To-date, 28 companies have been listed on Bursa Malaysia this year, with Paradigm Real Estate Investment Trust making its debut yesterday. Another three are expected to list by end-June – Ping Edge Technology Bhd (June 13), Cuckoo International (M) Bhd (June 24) and Pan Merchant Bhd (June 26) – bringing the first-half total to 31 IPOs. This puts Bursa Malaysia slightly past the halfway mark of its full-year target of 60 IPOs, but Ng warned that delays and repricings suggest growing caution among potential debutants. 'We've already seen two or three companies pushing back their listings,' said Ng. 'Several IPOs also revised their offer prices downward.' Cuckoo, which was initially scheduled to list on April 30, deferred its debut to June 24 due to 'near-term market challenges'. Its IPO price was also reported to have been revised to RM1.10 per share from RM1.29 previously, although this has yet to be confirmed by the company. Eco-Shop Marketing Bhd, which has since listed, similarly trimmed its IPO price to RM1.13 from RM1.21 before going public. Whether Bursa Malaysia hits its target of 60 listings this year now depends not just on pipeline readiness – but on whether the broader market gives debutants a reason to come forward. Across the shore, Singapore is taking a markedly different approach to reinvigorate its equity market. In February, the Monetary Authority of Singapore or MAS rolled out a bold S$5bil Equity Market Development Programme to boost liquidity on the Singapore Exchange by investing through selected fund managers focused on actively managed strategies targeting local small and mid-cap stocks. This is complemented by tax exemptions on fund manager income 'derived from funds investing substantially in Singapore-listed equities', a narrowed Global Investor Programme to channel more capital into listed equities, and expanded research grants to improve coverage and investor engagement in the equity market.
The Star
5 days ago
- Business
- The Star
Liquidity boost for Singapore
SINGAPORE'S equity market looks set to turn the corner in the second half of the year (2H25), buoyed by a shift in global trade tensions and a timely injection of liquidity from policymakers. For investors seeking value, yield and quality, the city-state is once again looking like a worthwhile bet. The optimism comes as the Monetary Authority of Singapore (MAS) prepares to roll out its S$5bil Equity Market Development Programme (EQDP), aimed squarely at boosting liquidity and breathing life into non-index counters. Billed as RM9.73 for the 1st month then RM13.90 thereafters. RM12.33/month RM8.63/month Billed as RM103.60 for the 1st year then RM148 thereafters. Free Trial For new subscribers only
Straits Times
01-06-2025
- Business
- Straits Times
ST Engineering hits all-time high; stock picks roll in after MAS update on $5 billion equities boost
Shares of SGX climbed through the week to reach a high of $14.33 on May 30 before dropping abruptly by almost 2 per cent to close at $14.02. ST PHOTO: LIM YAOHUI SINGAPORE - Shares of ST Engineering hit an all-time high last week after rising by 4.3 per cent to close on May 30 at $7.82. The company's shares have been on a tear since the start of 2025, climbing more than 68 per cent on the back of record 2024 results and increased dividends over the period. It also reported a solid first quarter for 2025, driven by strong growth in its defence and public security segment. The strong share price performance came ahead of the weekend's anticipated annual defence-focused Shangri-La Dialogue in Singapore. Addressing the audience at the dialogue on May 31, US Defence Secretary Pete Hegseth suggested that US allies and partners in Asia should take their cue from Europe, where members of the North Atlantic Treaty Organisation are committing to spend 5 per cent of their gross domestic product on defence. Shares of Singapore Exchange (SGX) climbed through the week to reach a high of $14.33 on May 30 before dropping abruptly by almost 2 per cent to close at $14.02. No announcements were made on the day. Trading activity on the exchange has increased in recent months, driven by market revival measures announced in February and growing investor interest in Singapore stocks as a safe haven amid global volatility. Almost 29.5 billion shares worth around $41 billion were traded in April, up from around 26.8 billion shares valued at $29.6 billion traded in March, according to SGX data. The average daily value of shares traded in April, at $1.9 billion, is the highest level since March 2020. Analysts pick potential winners ahead of $5 billion boost Trading on the SGX has included shares in companies outside the benchmark Straits Times Index (STI), supported by a central bank-led programme to allocate $5 billion in seed capital to Singapore-based funds for investing in local, non-STI stocks. Announced in February as part of the measures to revive the stock market, the Equity Market Development Programme (EQDP) has received positive interest from global fund managers, and suitable investment strategies will be shortlisted by end-September, the Monetary Authority of Singapore (MAS) said last week. Analysts reckon the funds will likely be deployed before the end of 2025 and have been highlighting stocks they believe could benefit from this bonanza. SIA Engineering is one of their favourites, with CGS CIMB, UOB KayHian, DBS and Morgan Stanley including the company in their list of stock picks. They like the company as demand for its aircraft maintenance, repairs and overhaul services is expected to grow. Systems assembly provider Frencken Group and property agency PropNex are also among the analysts' top picks, owing to the companies' strong revenue forecasts for 2025. Other selected stocks include instant coffee maker Food Empire, finance platform iFast, precision engineering business UMS Integration, supermarket chain Sheng Siong, Raffles Medical, technology solutions provider CSE Global, palm oil producer First Resources, transportation giant ComfortDelGro and construction firm Hong Leong Asia. Some analysts also like Oiltek International, a provider of vegetable oil processing technology, and Centurion Corp, which operates workers' dormitories in Singapore. Both companies have seen their share prices climb since the start of 2025, driven in part by Oiltek's upcoming transfer from the Catalist board to the mainboard and the potential listing of a real estate investment trust (Reit) by Centurion. Analysts from UOB KayHian said they are now more bullish on the Singapore market as a result of the anticipated injection of liquidity from the EQDP, and have raised their forecast for the STI to 4,054 points by the end of 2025 from 3,720 points previously, implying an upside of 5 per cent from current levels. They noted, though, that 'it will be critical for the authorities to ensure that the $5 billion is not a one-off and that as the market grows, it will be able and willing to continue to lend its support'. More firms could leave the local bourse Two more companies announced moves that may impact their SGX listing status even as efforts are being made to boost market interest and attract new initial public offerings (IPOs). Singapore Paincare on May 27 received a privatisation offer from Advance Bridge Healthcare at 16 cents a share, valuing the company at about $27 million. The local medical services company will be delisted from the Catalist board if the deal is successful, it said. Meanwhile, Chinese manufacturer Fuxing China Group said on May 29 that trading in its American depositary shares would begin 'very shortly' after it received approval to list on the Nasdaq on May 23. When contacted by The Straits Times, Fuxing China Group declined to confirm whether it would maintain its SGX listing or provide further details on the Nasdaq move. In 2025 so far, at least 15 companies have received privatisation offers, compared with just one IPO. This is despite ongoing efforts to draw more companies to list on the SGX, including proposals announced on May 15 to ease the disclosure requirements for firms pursuing an IPO here. Other market movers Shares of Samurai 2K Aerosol jumped by over 52 per cent last week and closed on May 30 at 9.6 cents. The aerosol paint distributor said on May 28 it had agreed with its insurer on a RM16.06 million (S$4.9 million) indemnity claim for a May 2024 fire at its Johor premises. It can also claim an extra RM1.79 million if the damaged properties are repaired according to certain conditions and within a set timeline. The insurance claim had initially been declined due to non-compliance of the insurance policy terms, according to its insurer. However, Samurai 2K escalated the matter to the Malaysian central bank and engaged consultants to help it negotiate the claims. The company reported on May 30 after market close a 31.4 per cent jump in revenue for the year ended March 31, to RM104.9 million. However, it registered losses of RM7.8 million due to the write-off of inventory worth RM12.7 million and property damage totalling RM3.5 million as a result of the fire. The insurance claims receivable will be registered in 2026. Acrophyte Hospitality Trust (AHT) jumped 23.4 per cent last week and closed May 30 at 29 US cents. AHT's managers on May 30 said they were evaluating a 'range of strategic options' that could result in a 'potential transaction' involving AHT's stapled securities, although this is not guaranteed. Stapled securities are financial instruments where two or more different securities are contractually bound together and traded as a single unit. The AHT group comprises Acrophyte Hospitality Property Trust and Acrophyte Hospitality Management Trust. The strategic review comes in the light of potential spending needs to upgrade AHT's current properties. This involves upgrades to seven Marriott and Hyatt-branded hotels in 2025, after six other hotels were upgraded in 2024. It also comes after a similar move by Frasers Hospitality Trust (FHT) in April, following which FHT's sponsor Frasers Property made a second attempt to privatise the stapled group at 71 cents per stapled security in May. FHT comprises Frasers Hospitality Reit and Frasers Hospitality Business Trust. AHT was formerly known as ARA US Hospitality Trust before the manager changed hands to come under Acrophyte AM, a unit of Acrophyte, which largely consists of the businesses of the formerly listed Chip Eng Seng. The entities are all ultimately controlled by property tycoon Gordon Tang and his wife Celine, who have multiple interests in property and construction, including Suntec Reit and Singapore property developer SingHaiyi. What to look out for this week Shares of OKP Holdings, which rose 9 per cent last week, could see more trading activity – after the market closed on May 30, it announced a $258.3 million contract from the Land Transport Authority to construct cycling paths across 11 towns in the eastern part of Singapore. The win brings OKP's net contract order book to a record high of $735.8 million, with contracts extending until 2031. Oiltek could see more trading, too. The company will officially transfer from Catalist to the SGX mainboard on June 6. Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
25-05-2025
- Business
- Business Times
MAS to shortlist fund managers for S$5 billion Equity Market Development Programme by Q3
[SINGAPORE] The Monetary Authority of Singapore (MAS) will shortlist fund managers for its S$5 billion Equity Market Development Programme by the third quarter of 2025. In response to media queries, an MAS spokesperson said that the programme, which was announced on Feb 21, has received 'good response' from global and regional asset managers. These managers have submitted proposed strategies for the programme, noted the spokesperson, adding: 'We aim to shortlist suitable strategies by the third quarter of 2025.' The S$5 billion Equity Market Development Programme will channel the funds to asset managers with a 'strong investment track record' and a focus on Singapore-listed equities. Funded through its investment portfolio and the Financial Sector Development Fund, the programme aims to enhance market liquidity and support Singapore's fund management ecosystem. The MAS spokesperson noted that the programme 'will allocate capital to Singapore-based fund managers through investment mandates that focus on actively managed strategies in Singapore equities'. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'It will support a diverse range of investment strategies, including those invested in or substantially invested in Singapore equities as part of their thematic or regional focus,' the spokesperson added. In the February announcement, MAS said it will begin evaluating eligible fund managers and strategies in the coming months, with both local and international managers able to participate. New and existing funds will also qualify. The strategies will be actively managed and diversified across various counters, rather than solely focusing on index component stocks. Industry observers said then that the programme would bring more attention to mid and small-cap stocks, as well as attract foreign funds to some extent. Analysts also said the Equity Market Development Programme will likely encourage more funds and products to come to the Republic, even as questions remain on its potential effectiveness. The programme is part of measures unveiled by a review group set up in August 2024 by Singapore's central bank to strengthen the local equities market. The panel is chaired by then-minister for transport Chee Hong Tat. Chee is now minister for national development.
Business Times
15-05-2025
- Business
- Business Times
SGX RegCo consults on regulatory changes to streamline IPO rules
[SINGAPORE] Listed issuers on the Singapore Exchange (SGX) will be expected to take on a more proactive role in providing timely and relevant disclosures, focusing on material information rather than following prescriptive requirements. The change comes as the Singapore Exchange Regulation (SGX RegCo) seeks market feedback on the proposed regulatory changes aimed at transitioning to a more disclosure-based regime, it announced on Thursday (May 15). These changes include streamlining qualitative mainboard admission criteria, refining quantitative mainboard admission criteria, removing the financial watch list, as well as revising post-listing queries and obligations. It said the proposed changes are in line with an approach that 'adopts a pro-enterprise stance alongside measures to strengthen investor confidence'. These reforms are part of recommendations to revive the local market, which were announced by the Monetary Authority of Singapore (MAS) equities market review group in February 2025. The changes are expected to complement other measures announced by the group to promote institutional participation, and foster an attractive and trusted market. These include the S$5 billion Equity Market Development Programme and tax incentives to encourage greater investment in Singapore-listed equities. The group also recommended adopting a more 'pro-enterprise regulatory stance' with regulatory measures moving Singapore towards a more disclosure-based regime. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up 'This will smoothen the path for enterprises to access the capital markets, allowing investors an expanded range of investing opportunities and better ability to make investment decisions in reliance on relevant and material information,' said Tan Boon Gin, chief executive officer at SGX RegCo. The aim is to assure market participants that the information on which they base their decisions is accurate and accessible as well as maintaining a fair market. 'To that end, we will ensure that regulatory oversight of both corporate disclosures and trading activity remains rigorous, even as we refine the manner in which such oversight is conducted and communicated, to ensure relevant and material information for investors is disclosed,' he added. Streamlining admission criteria for mainboard listings The proposed changes will also include streamlining the qualitative admission criteria for mainboard listings. SGX RegCo intends to maintain a prescriptive approach in critical areas such as an applicant's financial position and the track record of its directors, management and controlling shareholders. For other matters, the emphasis would be on ensuring companies provide relevant and robust disclosures to support informed investor decisions, rather than mandating how such matters should be resolved. Market participants told The Business Times that the moves could boost SGX's appeal as a listing destination, but cautioned that such a shift must be accompanied by robust investor safeguards, corporate governance and investor education. 'Traditional, prescriptive metrics often make it difficult for such companies to list – one reason we see so few tech firms on our exchange,' said Terence Wong, CEO at Singapore-based fund manager Azure Capital. He also stressed that investor education becomes even more critical in this new environment, as investors need to learn how to extract key insights from increasingly detailed disclosures. Luke Lim, managing director at brokerage Phillip Securities and chairman of Securities Association of Singapore, said: 'This approach recognises that today's capital markets are more diverse, dynamic and investor-led than ever before. Instead of prescribing what companies should or should not do, disclose with clear, relevant, and timely disclosures – and then let the markets decide.' Lock Yin Mei, managing director of Venture Law, noted that a merit-based assessment of qualitative criteria, such as conflicts of interest, represents only a snapshot at a specific moment. She said that as facts and contexts evolve, a prescriptive approach may not always be appropriate for every issuer. 'The alternative of disclosure and explanation, makes the issue public and places the responsibility with the issuer and professionals, for which under the proposals, they can be taken to task,' she added. Balancing regulatory oversight and market empowerment To support good companies, SGX RegCo is also proposing to remove the financial watch list, citing concerns over its unintended impact on business confidence and financing. The regulator said companies will still be required to announce if they report losses for three consecutive years. In the meantime, its half-yearly reviews related to placing companies on the watch list will be suspended. However, companies already on the list will remain listed during this period, regardless of whether they meet the exit criteria. In addition to the proposed listing rule changes, SGX RegCo also plans to refine its approach to post-listing queries and obligations. The regulator noted that issuing public queries for immaterial matters could create unnecessary alarm in the market. It is therefore proposing a more calibrated approach, including shifting to private engagement in certain cases, narrowing public disclosures to price-sensitive or trade-sensitive information, limiting the validity of trade-with-caution alerts to two weeks, and updating its suspension framework. All feedback is to be submitted by Jun 14.
