S'pore to face tough competition for IPOs from US, HK and London

Expected rivalry comes amid drop in firms going public over past two years

- Kang Wan Chern

With the market for initial public offerings (IPOs) showing signs of making a comeback in 2024, competition to capture new listings among major stock exchanges in Singapore, the United States, Hong Kong and London is expected to intensify in the months ahead, experts said.

"There will be a lot more competition for IPOs, and the Singapore Exchange (SGX) will have to work hard and think of innovative ways to attract good IPOs," said OCBC's managing director of investment strategy Vasu Menon.

The expected rivalry between major bourses to draw new listings comes at a time when the number of companies making it to market has dwindled over the past two years, as central banks aggressively raised interest rates.

Looking ahead, the big uncertainty hanging over IPO markets is the timing and quantum of the Federal Reserve's rate cuts this year, Mr Menon said.

"Investors are quietly worried that if inflation proves to be sticky, then the Fed may not even cut rates or cut rates only marginally which could hurt riskier assets like stocks." Meanwhile, investors have become more risk-averse and discerning in what they buy, making it much harder for companies, especially smaller, lesser-known ones, to sell their shares to the public.

As a result, companies still keen to attempt a listing will compare the SGX with other major stock exchanges to see where they can get better investor reception, valuations and liquidity.

Ms Tay Hwee Ling, disruptive events advisory leader for Deloitte South-east Asia and Singapore, said companies prefer to list on a market that has investors who know the firms well and can best support their growth strategy.