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Independent Singapore
29-07-2025
- Business
- Independent Singapore
SGX's listing gambit: Opportunity or illusion?
SINGAPORE: The Singapore Exchange's (SGX) ambitious strategy to attract listings is going through a significant change, revealing a mix of opportunities and challenges. After a slow start to 2025, SGX is showing signs of renewed energy. Recent debuts include Info-Tech Systems on Jul 4, NTT DC Reit, the largest real estate investment trust IPO in 10 years, and China Medical System as a secondary listing. The IPO pipeline is improving, a stark contrast to the first half of the year when Singapore saw just one listing compared to Malaysia's 32. Of the 29 secondary listings on SGX's Mainboard, nine have come since 2020, mainly from Hong Kong. The performance has been mixed, with some stocks facing low trading volumes and investor disinterest. AMTD Idea represents these issues, seeing its shares drop 74% after its SGX debut. However, there are positive developments. PC Partner Group stands out, rising from 85 cents to over $2 since its November 2024 listing, boosted by demand for AI-driven chips. The company's move to Singapore shows potential for success. A closer look shows some subtle challenges. Many upcoming listings are spin-offs from existing companies, such as Coliwoo from LHN Group and Lum Chang Creations from Lum Chang Holdings. This raises questions about real market growth. The Monetary Authority of Singapore (MAS) is taking action. Proposed regulatory changes include simpler prospectus reuse and tax breaks to attract more listings. The exchange has also introduced Singapore Depository Receipts (SDRs), with 21 securities currently available. Mark Liew, CEO of PrimePartners Corporate Finance, the issue manager for AMTD Idea and TSH Resources' Singapore listings, noted in an interaction with The Edge Singapore: 'I know of so many high-net-worth individuals who happily trade US, Hong Kong and China stocks. But for Singapore, they want safety.' 'These individuals see their Singapore portfolio as a hedge, giving them good income. If everything elsewhere is too volatile, they come back to Singapore. In that sense, the volatility and trading are not there in Singapore,' he added. However, other observers call for a broader view, highlighting how investors in Singapore undervalue growth stocks compared to markets like Hong Kong. This is a crucial market perception problem. Key challenges in Singapore include: Low trading liquidity Limited interest in growth stocks High regulatory compliance costs Reliance on spin-off listings While the benchmark Straits Times Index (STI) is rising — it's surpassed the 4,000-point mark — fundamental questions remain. Are these listings genuinely deepening the market, or just inflating headline numbers? As the market review committee prepares to release its next recommendations, the challenge is clear. SGX must prioritise quality over quantity. Important capital formation, strong governance, and lasting trading interest should take precedence over just counting short-term listings. The final decision is still pending. Are secondary listings a strategic opportunity or an expensive detour?
CNA
22-07-2025
- Business
- CNA
CNA938 Rewind - Will NTT DC Reit recover from its weak SGX debut?
Singapore's NTT DC Reit, a data centre real estate investment trust, had a lacklustre market debut after riding a wave of AI interest to raise $773 million in the city-state's biggest IPO in four years. What could be weighing down on its performance? And is there really no saving grace for the SGX? Hairianto Diman chats with Kenny Loh, Wealth Advisory Director, REIT specialist and SGX Academy Trainer to find out.
Business Times
20-07-2025
- Business
- Business Times
Will NTT DC Reit recover from its weak debut?
[SINGAPORE] It was a good week for investors in the Singapore market, except perhaps for those who took a chance on the initial public offering (IPO) of NTT DC Real Estate Investment Trust (Reit). The much-hyped data centre trust, which began trading last Monday (Jul 14), ended the week at US$0.95 – or 5 per cent below its IPO price of US$1. With its focus on a hot asset class, and GIC among its cornerstone investors, NTT DC Reit drew a lot of attention when it launched its IPO. Based on the nearly 599.9 million units available, the offering was approximately 4.6 times subscribed. An additional 51.5 million units were over-alloted. NTT DC Reit also came to market at a seemingly opportune moment. For one thing, the Straits Times Index (STI) has been on a tear since the Liberation Day sell-off in April, and has closed above the 4,000 mark on every trading day since Jul 2. On Friday, the local-market benchmark closed at 4,189.50, up nearly 2.5 per cent for the week. There has also been ample appetite in the market recently for Reits that own data centres. In fact, among the seven Reits that are components of the STI, the best performer last week was Keppel DC Reit (KDC) – which rose 4.1 per cent. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up This bump might have been partly due to Maybank initiating coverage on KDC, with a 12-month target price of S$2.40. In a report dated Jul 17, the research house said that KDC – which holds 24 data centres across 10 countries, worth some S$5 billion – is set to benefit from big trends such as digitalisation, cloud migration and the adoption of artificial intelligence. Maybank is forecasting KDC's distribution per unit (DPU) to grow 4.9 per cent a year to 2027, driven by rent escalation and acquisitions. KDC closed Friday at S$2.28, which reflects a 2024 DPU yield of 4.1 per cent. By comparison, NTT DC Reit holds six data centres with an appraised value of nearly US$1.6 billion. At its IPO price, it is forecast to deliver an annualised distribution yield of 7.5 per cent for the nine months to Mar 31, 2026; and a distribution yield of 7.8 per cent for the full year to Mar 31, 2027. So, why did NTT DC Reit have such a lacklustre debut? Where are all the investors who tried to get their hands on its units during the offering? Why is the market not excited about its high projected distribution yield? Rising risks for S-Reits One concern I keep hearing is that NTT DC Reit's projected yield may not be sustainable – because it is based on a 100 per cent payout of its distributable income, and the Reit's capital expenditure requirements may rise in the future. Another concern is that NTT DC Reit faces tenant concentration risks, with its top 10 tenants accounting for 62.6 per cent of its monthly base rent. Worse, its largest tenant – described in its prospectus as a Fortune 100 US automotive company – accounts for 31.5 per cent of its total monthly base rent. Many market watchers assume that NTT DC Reit's largest tenant is Tesla. However, NTT DC Reit's agreements with its customers contain confidentiality provisions that prevent disclosure of their identities. Its prospectus said: 'For many of these customers, it is critical that the geographical locations of the data centres in which (their) equipment, information and data are stored are kept confidential in order to minimise the risk of physical threats and intrusions into the relevant data centre.' The way I see it, the assumption that NTT DC Reit is heavily exposed to Tesla could haunt it in the months ahead – sending a chill down the spines of investors whenever the electric vehicle maker, or its chief executive Elon Musk, makes headlines for the wrong reasons. Responding to questions about this risk, the manager of NTT DC Reit said its largest tenant uses its data centres for mission-critical workloads, and has leases extending to 2033 with no termination clause. The manager added that the tenant is absent from the assets that NTT DC Reit may acquire from the sponsor group over time. '(Therefore), their concentration will only decrease as the Reit continues to make incremental acquisitions.' Another factor that might have contributed to NTT DC Reit's weak debut is the uncertainty about the direction of long-term global interest rates. Ten-year US Treasury bonds currently yield about 4.42 per cent; in 2019, the yield was significantly less than 3 per cent. This is affecting all the Singapore-listed Reits (S-Reits), of course. The iEdge S-Reit Index chalked up a total return of 54.4 per cent during the five-year period up to end-2019, which trounced the STI's total return of 14.9 per cent. The tables turned, however, as interest rates soared following the pandemic; and as companies such as Keppel, Sembcorp Industries and Singtel unlocked value and refocused their businesses. Over the five-year period up to last Friday, the iEdge S-Reit Index returned just 4.6 per cent, while the STI returned 99.3 per cent. The iEdge S-Reit Index has lagged since the beginning of this year as well, with a total return of 5.2 per cent versus STI's total return of 13.4 per cent. While income-oriented investments remain hugely popular with local investors, the most exciting new listings over the next couple of years may well not be in the S-Reit field. Hot data-centre trusts To be clear, I'm not suggesting that NTT DC Reit will not recover from its rocky debut. While higher interest rates since the pandemic have weighed on S-Reits recently, two of the three best-performing components of the iEdge S-Reit Index over the past decade are focused on data centres – namely, KDC (with a total return of 254.4 per cent) and Mapletree Industrial Trust (total return of 133.6 per cent). It is entirely possible, in my view, that NTT DC Reit will eventually find its feet and perform strongly. Of course, much depends on it achieving or surpassing the forecasts and projections in its prospectus, and acquiring an additional asset or two from its sponsor group on terms accretive to its DPU. There is certainly a lot riding on the success of NTT DC Reit. This is, after all, the most significant new listing in the Republic since the Monetary Authority of Singapore formed the Equities Market Review Group last year. The measures announced by the review group so far revolve around spurring demand in the local market, and making it easier for companies to list in Singapore. Perhaps the review group should also look into whether enough is being done to ensure that companies that do list are able to effectively engage with investors, and inclined to quickly address their concerns. Drawing more new listings to the Singapore market will matter only if they are exciting to local investors, and enhance the vibrancy of the market ecosystem.
Business Times
14-07-2025
- Business
- Business Times
NTT DC Reit, SGX's largest Reit listing in 10 years, closes flat on debut
[SINGAPORE] Units of NTT DC Real Estate Investment Trust (Reit) ended flat on its debut on Monday (Jul 14). Units of the Reit inched up 3 per cent or US$0.03 to US$1.03 at 2pm, before falling back to their offer price of US$1 by the trading day's end. The mega listing is the largest Reit IPO on the Singapore Exchange (SGX) in a decade. NTT DC Reit has an IPO market capitalisation of US$1 billion and is the third pure-play data centre Reit listed in Singapore. The listing also marks one of Asia's largest data centre Reit IPOs, expanding opportunities for investors to gain exposure to assets driving the boom in artificial intelligence. Speaking at the listing ceremony, Loh Boon Chye, the chief executive officer of SGX Group, said NTT DC Reit's listing reinforces Singapore's role as Asia's Reit 'launchpad'. He noted that following the move, other issuers are 'picking up the pace' for their own listings. 'Conversations are building, pipelines are forming, and confidence is gaining ground, driven by listings like this,' he added. 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 Doug Adams, CEO of NTT Global Data Centres, said that while NTT DC Reit had considered listing in US and Japan, it eventually decided on Singapore due to its 'vibrant economic economic community' and support for Reit structures. 'We are looking to continue to feed this Reit with strong global assets from the right markets that we believe will give a significant return to our investors… to get a dependable return from their investment.' NTT Global Data Centres is the data centre business arm of NTT Group, which the Reit sponsor is part of. NTT DC Reit's portfolio comprises six data centres – four in the US, one in Austria and one in Singapore – with an aggregate appraised value of US$1.6 billion. About 600 million units are on offer, comprising US$1 per unit for 569.9 million units in its international placement, and 30 million units at S$1.276 per unit for the Singapore public offer. According to a bourse filing on Friday, the public tranche of its Singapore IPO was around 9.8 times oversubscribed, where there were 14,166 valid applications for an aggregate of 294.8 million units, based on the 30 million units available for subscription. A group of cornerstone investors will subscribe to over 172 million units in total, representing 16.8 per cent of all units. This runs concurrently, but separately, from the public offering. One of these anchor investors is GIC, which is subscribing to more than 100 million units making up 9.8 per cent of the total units in issue after the offering. With the Reit's listing, GIC is now a substantial unit holder as well as the second-largest investor in NTT DC Reit after its sponsor. The other cornerstone investors are AM Squared, Ghisallo Master Fund, Hazelview Securities, Pinpoint Asset Management (Singapore), Viridian Asset Management and UBS acting through its Singapore branch, on behalf of wealth management customers. In its prospectus, NTT DC Reit noted that the global data centre market has demonstrated high growth, with commissioned power growing from 18.2 gigawatts (GW) in 2020 to 49.1GW in 2024. This represents a compound annual growth rate of 28.1 per cent, and estimates are for it to continue growing at double-digit pace until 2027. NTT DC Reit joins Digital Core Reit , which listed in December 2021, and Keppel DC Reit , which rejoined the Straits Times Index last month. In total, the pure-play data centre S-Reits listed on SGX provide investors with exposure to around S$9 billion of global data centre assets. There are now 41 Reits and property trusts listed on the SGX, with a collective market capitalisation of about S$94 billion. 'The listing taps into the immense growth potential of data centres, an asset class gaining strong investor interest globally,' said Pol de Win, head of global sales and origination at SGX Group. 'This move underscores Singapore's position as Asia's leading Reit hub. Not only does this reflect the strength of our market, but also expands investment opportunities in digital infrastructure for investors worldwide.'
South China Morning Post
14-07-2025
- Business
- South China Morning Post
Singapore IPO revival hopes rise as NTT's Reit debut gains
Advertisement NTT DC Reit gained as much as 3 per cent on Monday in its trading debut, outpacing the benchmark Straits Times Index. This came after it secured the city state's sovereign wealth fund as a rare cornerstone investor. The US$773 million data centre listing is being closely watched as the spark that could revive Singapore's moribund IPO scene, following an all-hands-on-deck effort to reboot it. There was a palpable sense of relief among the executives, bankers and exchange officials at the trading ceremony, where a big barrel of sake was broken to symbolise new beginnings and good fortune. With the IPO, Singapore hopes to join the party in the region. Bourses across Asia-Pacific have been raking in new listings, with firms raising US$39 billion of fresh capital so far this year, the most since 2023. Hong Kong – the world's top IPO venue this year – and India are booming, while the city state has watched from the sidelines. 'This listing is hugely important,' said Pol de Win, head of global sales and origination with bourse operator Singapore Exchange (SGX). 'The IPO market has been challenging for a while, so it's important to see a high quality asset come to market and show the way for others.' The exchange, along with banks and others, had been in talks with NTT executives for years, he said. Advertisement Underscoring the stakes for the country, its sovereign wealth fund GIC bought more than US$100 million worth of units as a cornerstone investor, making it the real estate investment trust's second-biggest shareholder. It was the first time GIC provided such support to a local IPO, notwithstanding the 2010 jumbo listing of its overseas logistics unit, based on Bloomberg checks.
