More companies went public on the Singapore Exchange last year compared with 2013. However, a dearth of blockbuster listings meant that the total amount of funds raised through initial public offerings (IPOs) in 2014 was far lower than in 2013.
Most of the new listings last year were also small Catalist companies, which could happen again this year as the exchange keeps up efforts to attract small and medium-sized enterprises (SMEs).
Industry experts said that IPO activity was fairly muted in the first six months of last year, but its pick-up near the end of the year may continue into early this year at least.
Sectors such as real estate investment trusts (Reits), offshore and marine, commodities and health-care stocks will likely continue to be the bourse's strongholds this year and its focus on SMEs could bring more diversity, they added.
"The equity markets in the first half of 2014 had been relatively quiet due to the expectation of weak economic growth from the global economy," said Ms Eng-Kwok Seat Moey, group head of equity capital markets at DBS Bank, which handled most of the major IPOs in Singapore last year.
Investors were also less keen on equities after the United States Federal Reserve said that it would end its monetary stimulus programme, she noted.
"However, IPO activity in Singapore rebounded in the third quarter, partly due to more certainty on the Fed's direction for interest rate hikes, improving global economic data, reasonable valuations and low market volatility."
A total of 28 IPOs were mounted last year, slightly more than the 25 IPOs the year before, according to data from financial portal ShareInvestor.
Last year's IPOs together raised nearly $3.5 billion. That figure paled in comparison with the roughly $6.3 billion of equity funds that IPOs in 2013 raised, according to the experts' estimates.
The higher sum in 2013 was mostly caused by two blockbuster IPO deals that year, which each raised more than $1 billion - Mapletree Greater China Commercial Trust and Asian Pay Television Trust.
Dr Ernest Kan, chief of operations for clients and markets at Deloitte, said that though 2013 had been a bumper year for fundraising, the listings last year boosted the diversity of the local bourse.
More "unique" firms, such as Japanese golf course owner Accordia Golf Trust, were listed last year and that could pave the way for more international and different companies to float here, he said. "We expect to see more interesting sectors coming out to market... like entertainment and movie production, luxury cars and watches and military or defence-related firms".
Experts said as the bourse is established in sectors such as Reits, offshore and marine, commodities and medical stocks, that solid reputation will continue to draw companies in those industries to list here. The SGX's focus on SMEs this year is also expected to boost the diversity of offerings even further.
Ms Eng-Kwok said that with an interest rate increase looming on the horizon, SMEs cannot rely solely on loans to expand their businesses and are increasingly turning to the equity capital market to raise long-term funds.
The exchange is said to be in the process of setting up a dedicated team to help SMEs go public, she noted.
This article was first published on January 2, 2015.
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