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20-05-2014, 07:57 AM
Defensive plays still in vogue: DBS
It aims to bring such firms to market
Published on May 20, 2014 1:29 AM
By Jonathan Kwok
DBS Bank is looking to bring more firms to the market which meet investor demand for "defensive" stocks that promise stable cash flows and yields.
The bank, which is Singapore's top underwriter for equity issues, did not specify which deals it is working on, or which sectors the companies are from. Defensive stocks typically include telcos and real estate investment trusts (Reits) that provide a good yield but not necessarily fast growth.
DBS capital markets head Eric Ang reckons that is what investors want. He noted that bonds - another yield instrument - have actually outperformed equities in general this year.
Mr Ang said: "Because there is a bias towards fixed income, what do we do? We then look at a more defensive type of companies and we actually bring them to market ahead of those that we think are more challenging."
He added that DBS is "trying to determine which are the kind of deals we can bring to market". "Clearly, the defensive-type investment opportunities are preferred in today's market."
Mr Ang was speaking at a briefing yesterday to announce that he will hand over the reins of his unit to Mrs Eng-Kwok Seat Moey, deputy head of capital markets, next month.
DBS topped the league table for equity fund-raising last year, underwriting US$1.97 billion (S$2.5 billion) in 21 deals. Its market share for Singapore equity fund- raising, including initial public offerings (IPOs) and secondary exercises like rights issues, was 17.8 per cent, Bloomberg data shows.
Still, the general market for IPOs has been soft with only two mainboard listings this year, raising $735 million in all.
The market here has been shifting towards mergers and acquisitions, noted Mr Ang. "Businesses are looking towards other businesses to acquire to grow." Reverse takeovers are becoming an alternative to IPOs, he added.
Mrs Eng-Kwok said: "It's the general market that is slowing; it's not specific to Singapore and Hong Kong."
DBS advised PACC Offshore Services Holdings - the second mainboard IPO here - and worked with South Korea's Lotte Shopping, which in March delayed listing a US$1 billion Reit on the Singapore Exchange. In Hong Kong, the bank handled the IPO of HK Electric Investments, a business trust-like entity, and also worked with pork producer WH Group, which cancelled its IPO last month amid weak demand.
"Hong Kong has, over the years, overtaken Singapore. They have the benefit of the China market. A lot of big IPOs happen in Hong Kong," said Mrs Eng-Kwok. "That's why Hong Kong remains a key market for DBS."
jonkwok@sph.com.sg
It aims to bring such firms to market
Published on May 20, 2014 1:29 AM
By Jonathan Kwok
DBS Bank is looking to bring more firms to the market which meet investor demand for "defensive" stocks that promise stable cash flows and yields.
The bank, which is Singapore's top underwriter for equity issues, did not specify which deals it is working on, or which sectors the companies are from. Defensive stocks typically include telcos and real estate investment trusts (Reits) that provide a good yield but not necessarily fast growth.
DBS capital markets head Eric Ang reckons that is what investors want. He noted that bonds - another yield instrument - have actually outperformed equities in general this year.
Mr Ang said: "Because there is a bias towards fixed income, what do we do? We then look at a more defensive type of companies and we actually bring them to market ahead of those that we think are more challenging."
He added that DBS is "trying to determine which are the kind of deals we can bring to market". "Clearly, the defensive-type investment opportunities are preferred in today's market."
Mr Ang was speaking at a briefing yesterday to announce that he will hand over the reins of his unit to Mrs Eng-Kwok Seat Moey, deputy head of capital markets, next month.
DBS topped the league table for equity fund-raising last year, underwriting US$1.97 billion (S$2.5 billion) in 21 deals. Its market share for Singapore equity fund- raising, including initial public offerings (IPOs) and secondary exercises like rights issues, was 17.8 per cent, Bloomberg data shows.
Still, the general market for IPOs has been soft with only two mainboard listings this year, raising $735 million in all.
The market here has been shifting towards mergers and acquisitions, noted Mr Ang. "Businesses are looking towards other businesses to acquire to grow." Reverse takeovers are becoming an alternative to IPOs, he added.
Mrs Eng-Kwok said: "It's the general market that is slowing; it's not specific to Singapore and Hong Kong."
DBS advised PACC Offshore Services Holdings - the second mainboard IPO here - and worked with South Korea's Lotte Shopping, which in March delayed listing a US$1 billion Reit on the Singapore Exchange. In Hong Kong, the bank handled the IPO of HK Electric Investments, a business trust-like entity, and also worked with pork producer WH Group, which cancelled its IPO last month amid weak demand.
"Hong Kong has, over the years, overtaken Singapore. They have the benefit of the China market. A lot of big IPOs happen in Hong Kong," said Mrs Eng-Kwok. "That's why Hong Kong remains a key market for DBS."
jonkwok@sph.com.sg