Deal watch: An SGX sign at the Singapore Stock Exchange. Only three IPOs were issued by Singapore companies in the 1Q25, all of which were launched on Nasdaq, while none took place on the SGX. — Reuters
SINGAPORE: Despite rising market volatility triggered by uncertain trade policies globally, some experts reckon that corporate deal-making opportunities will persist in Singapore as companies reconfigure their strategies and supply chains.
Even though a decline in corporate deals and listings is expected globally as volatility rises, firms seeking gunpowder for growth and for expansion may look to capital markets here to raise the funds they need, experts said.
Companies with plans to grow may list on the Singapore Exchange (SGX) as a way to fuel expansion, especially if funding options in other markets hit harder by global volatility tighten, said Ong Hwee Li, chief executive officer (CEO) of corporate finance consultancy firm SAC Capital.
Importantly, foreign businesses will want to understand how to leverage Singapore’s capital markets, which may spur deal-making activities in the private and public spaces here, he added.
Ong noted that the uncertainties arising from the tariffs may also impact ongoing privatisation deals on the SGX.
“In general, privatisations will slow down as the value the offeror is willing to pay to delist a company and take it private may be significantly lower,” he told The Straits Times.
“For a family-owned listing, it will depend on whether the family is of the view that the next generation can manage the business well and whether the family can get a good value for its assets or business from the market.”
Ong said: “On balance, I feel deal-making activities will increase.”
Jason Saw, group head of investment banking at investment services firm CGS International, said that while a slowdown in the economy will impact business sentiment and earnings in Singapore, the current environment could represent a new cycle of growth for some companies.
He noted that current geopolitical tensions and a growing urgency for diversification are actually leading to more deal opportunities because of the rising need to build local supply chains, and that initial public offerings (IPOs), too, will be necessary to enable investors to recycle capital and firms to raise funds.
Luke Pais, CEO of consultancy firm Ernst & Young Corporate Finance, said the impact of global trade volatility on IPOs and other corporate deals will vary by sector, depending on how companies are affected by the tariffs.
“Businesses that are focused on domestic or intra-Asia trade could see higher investor demand,” Pais said, adding that some firms may also seek structured finance deals for short-term relief as they realign their businesses in the current environment.
Still, the changing landscape for corporate deals and IPOs in Singapore comes as billions of dollars’ worth of listings and acquisitions elsewhere have been put on hold since US president Donald Trump announced on April 2 US tariffs on all imported goods.
Furthermore, ticket platform StubHub Holdings, fintech giant Klarna Bank and trading platform eToro Group are among those who have called off IPOs in the United States.
Investors have also turned cautious in Malaysia, which has been the top IPO market in South-East Asia since 2024.
On April 9, home appliance company Cuckoo International said it was delaying its Bursa Malaysia listing by two months owing to current market volatility.
The rout also saw speciality chemicals maker SumiSaujana Group drop 25% below its IPO price on its debut on the Malaysian stock exchange.
While Singapore may now appear more appealing to companies planning to tap its investor access and listing regime to take their businesses public, the local IPO market has nevertheless been declining in recent years, prompting central bank-led measures to draw more listings on the SGX.
During the first quarter of 2025 (1Q25), Singapore’s equity capital market activity fell 52.4% from the same period a year ago to US$265.7mil (S$350mil), the lowest 1Q total since 2016, according to data by the London Stock Exchange (LSEG).
Only three IPOs were issued by Singapore companies in the 1Q25 – Uni-Fuels Holdings, FBS Global and Basel Medical – all of which were launched on Nasdaq, while none took place on the SGX.
A fourth Singapore company, swim school Fitness Champs, is expected to begin trading on Nasdaq in April.
In 2025 so far, only two companies – car dealer Vin’s Holdings and candy-maker YLF Group Marketing – have submitted offer documents to list on the SGX.
In 2024, only four firms successfully carried out their IPOs here.
Some experts expect the global macroeconomic volatility to further dampen IPO sentiments and transactions here and in the wider Asean region, saying investors would prefer to wait until the market is more stable before attempting to list.
Elaine Tan, senior manager at LSEG Deals Intelligence, said: “As global trade dynamics evolve, Singapore faces new challenges stemming from the latest round of US tariffs.
“These tariffs have already led to delays and cancellations in mergers and acquisitions and IPO activity globally.”
She added: “Singapore’s deal-making landscape could potentially see a decline in transactions and listings, particularly in sectors highly exposed to global markets.”
Insead Associate Professor Ben Charoenwong, a finance expert, said deals involving companies with significant United States or China operations, such as those in technology, high-end manufacturing and other export-oriented businesses where tariffs will directly affect valuations and future earnings projections, will be the most vulnerable.
Charoenwong explained that capital market activities such as IPOs and other corporate deals are key to encouraging early-stage investment and entrepreneurship. — The Straits Times/ANN
