Cross-border IPOs slump in volatile market
SINGAPORE - The number of cross-border listings have slumped amid volatility in the financial markets, with only 25 such initial public offerings worth US$4 billion (S$5.05 billion) this year.
This is down from the 78 listings, worth US$33 billion, for the whole of last year, according to Ernst and Young, and a far cry from the peak of 263 deals in 2007.
With many firms choosing to wait out the market volatility, many deals are left waiting in the pipeline, analysts say.
Asia's largest hospital operator IHH Healthcare is set to list in Malaysia and Singapore later this month. The US$2 billion IPO is the world's third-largest year to date and the biggest one of a cross-border nature.
Other potential listings include Manchester United in New York and Formula One in Singapore.
But observers say interest in cross-border IPOs has waned, as they come with higher execution and regulatory risks.
Mr Alan Lok, Principal Consultant at Sabio Global, said: "The interest in equity has dropped quite a fair bit. A lot of investors are on the sidelines. This has dampened the interest in any upcoming cross-border collaboration that were intended to encourage more participation in equity issues."
Still, Singapore-listed share registrar Boardroom is optimistic. It has entered into an alliance with London-based registrar Capita and hopes to facilitate more cross-border IPOs between Asia and Europe.
Boardroom CEO Kim Teo said: "The pipeline levels are at record levels from what we see across the region. Given a very bad, negative second quarter, we see markets stabilising in the third quarter. IPO interest ... should pick up in the final quarter of this year or in the first quarter of next year."
By Linette Lim
12 July 2012