SGX Is Left Quite High And Dry In The Global IPO Game – A Good Idea For Punters

The SGX caught my attention earlier after reading a report of the FT that SGX is slipping fast and far behind her regional rivals. And with 8 IPO’s slated for this week in the US, I decided to find out where we stand.

First published in Hard Choices (not the book) – SMRT, Starhub, delistings and the SGX. https://tradehaven.net/market/hard-choices-not-the-book-smrt-starhub-delistings-and-the-sgx/

…about half the companies in the FSSTI are GLC’s, government linked – MRT excluded….
SGX is not doing too well except on their commodity front.

“Last year Singapore’s stock exchange was overtaken in terms of trading volume by its Thai counterpart, knocking Singapore into second place in Southeast Asia for the first time.
More recently, it was also overtaken by Japannext, a relatively small trading platform that competes with the Tokyo bourse. This makes SGX, the Singapore exchange, Asia’s 9th largest share market – a frustrating state of affairs for an exchange that prides itself on being “the Asian gateway” for investors in the region.”
http://www.ft.com/intl/cms/s/0/aa39866c-caa6-11e3-9c6a-00144feabdc0.html?siteedition=intl#axzz2zrIYJTaw

9th place is not fun for ranking hungry Singapore.

Losing MRT would be even less fun after all the delistings we are potentially seeing led by Capitamalls Asia, Olam and HPL. We have already lost Guthrie and WBL in the past half year and running dry on decent IPOs which does not give the average investor a great deal of options. http://business.asiaone.com/news/potential-delistings-cast-pall-investors-choice

This comes at a time when global M&A has topped US$ 1.2 trillion for the first time in history. http://www.reuters.com/article/2014/04/25/investment-banking-activity-survey-idUSL6N0NH3KN20140425

For the entire 2014, Singapore has only seen SGD 1.34 bio worth of listings of which SGD 814 mio were IPOs. That is just 17 deals in total and less than 1% of the total global IPO pie.

I shrugged till I pulled out the charts and found that Malaysia has more than doubled on our 2014 listing performance, we are about an eighth of what Hong Kong has done and Indonesia is hot on our heels.

SGX IPO

The 2012 dip in Singapore could be attributed to the failed Dynasty Reit dual tranche IPO and Singapore also missed out on the much hyped Formula One IPO last year. Then the Blumont scandal struck, which was a big damper on  local stock sentiments.

More bad news.
“Aircraft leasing company GE Capital Aviation Services is looking to raise about US$700m in a Hong Kong IPO this year after scrapping plans for a business trust listing in Singapore….
Investec Aviation Trust, another aircraft leasing business trust, also shelved a US$350m–$450m Singapore IPO in May last year after investors showed little interest in the listing, despite talk of a dividend yield of 8%–9%.” http://www.ifrasia.com/equities-ge-chooses-hong-kong-for-aircraft-leasing-ipo/21139663.article

To add insult to injury, we are seeing a queue of possible delistings starting with Capitamalls Asia, HPL and Olam after losing Guthrie and WBL half a year ago. Privatisation rumours of the MRT is keeping its share price up even with their first ever loss reported on 1 May. http://www.straitstimes.com/news/business/companies/story/smrt-reports-25m-loss-core-business-the-first-time-20140501

Hong Kong is also smarting this year from the Ali Baba snub just because they did the right thing about Class A and Class B shares with non voting rights. WH Group (who bought US Smithfield last year) also failed to get their IPO off the ground in Hong Kong recently.

The malaise will persist, unfortunately, with volume dominated by blue chips these days, leaving penny stock punters out cold and stock brokers complaining even as SGX iron ore futures volumes hit high (http://www.ft.com/intl/cms/s/0/31726402-d4f5-11e3-9187-00144feabdc0.html#axzz31a1zKZrz).

Now we have come to my idea bit !

Switch !

Switch to trading currencies, commodities, stock index and option futures.

Stock brokers, double up with futures broking too.

Daily foreign exchange turnover is US 5.3 trillion globally according to the BIS in its latest “Triennial Central Bank Survey“.

Japanese housewives a.k.a. the Mrs Watanabes are notorious for their astute trading skills and ability to move the AUD/JPY market.

Trading global products will not only be educational and informative, it shall also serve to broaden the typical Singaporean’s world views.

According to the Bloomberg Markets Global Investor Poll, 38 percent of respondents — who work in the global financial industry — say that stock trading is rigged against the average investor. http://www.bloomberg.com/video/stock-trading-rigged-against-average-investor-9uLajF_CR92XfkxcKfA3KA.html

Besides we will all be doing SGX a favour, reputation wise, if we all stopped playing the Uncle strategy in the penny stock game. https://tradehaven.net/market/getting-rich-on-penny-stocks/

By the way, did I mention I think I may have got my hands on a stock price engineering manuscript ?

 

PS: Please note that foreign currency, options and futures trading entail considerable risk and require sufficient depth of market knowledge. Market users will be required to demonstrate credible understanding of the products in addition to signing off a declaration of their awareness to their risk undertaking.