Energy companies and trusts dominated the listings market this year, but consumer-driven stocks and evergreens like health-care and environmental stocks will shine next year, said OCBC Bank.
It also noted that investors are upbeat on the region's outlook, citing positive sentiment from the Indonesian and Indian elections and China's shift from a manufacturing base to a consumer market supported by cheaper products made across South-east Asia.
OCBC's head of corporate finance Tay Toh Sin told a briefing yesterday: "With all these positive effects, investors will be looking not so much at yield products like Reits (real estate investment trusts) and commodity-related products.
"People are looking more at capital appreciation, like in consumer-driven stocks. We're expecting more corporate (listings) from education, consumer-related, water-treatment and pollution-control sectors."
The trend has already begun.
Last month, Chinese conglomerate Citic joined forces with private equity firm KKR to make a takeover offer for water treatment firm United Envirotech.
Reits will also be hit when a tax benefit that makes income from foreign properties tax-exempt expires at the end of March next year. "Everyone is anticipating an extension, but the (Government's) indication is uncertain," said Ms Tay.
The uncertainty may be driving firms to tap capital markets with a corporate listing rather than as a Reit. This occurred in October, when Perennial Real Estate Holdings completed a reverse takeover of Catalist-listed night-spot operator St James Holdings.
Initial public offerings totalled US$2.6 billion (S$3.4 billion) this year, down from US$5 billion last year. Last year's numbers were boosted mainly by a $1.6 billion mega deal by Mapletree Greater China Commercial Trust as well as a $1.4 billion offering by Asian Pay Television Trust. Still, the Singapore Exchange had 25 IPOs this year, from 24 last year.
The outlook for the debt market next year is also strong, said Mr Tan Kee Phong, OCBC's head of capital markets.
New issues of corporate bonds this year totalled $23.4 billion, up from $19.8 billion last year. Mr Tan expects that to rise next year.
"In the first half of next year I think we'll see a little bit more activity because interest rates are still low," he said.
"Liquidity is still there, and inflation not a concern. There are concerns about deflation but they are not recessionary."
This article was first published on December 10, 2014.
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