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22-03-2011, 09:57 AM
I guess this is further "proof" that IPOs are usually over-priced? Or perhaps there was no need for such "proof" in the first place. 
IPO plans take a back seat due to lacklustre market
by Stella Lee 04:46 AM Mar 22, 2011
SINGAPORE - Companies with IPO aspirations are delaying their listing plans both globally and in Singapore due to the current lacklustre market sentiment, with many now adopting a wait-and-watch approach, as the turmoil in the Middle East and the crisis in Japan have made investors nervous.
The MSCI Index for Asia-Pacific declined as much as 8 per cent in only three days after the earthquake struck Japan on March 11. The benchmark fell to its lowest level in almost six months.
This is bad news for companies looking to sell shares for the first time through initial public offerings (IPOs).
"There is no reason for investors to take the risk of an unknown entity which is an IPO against an existing known company in the market," said Mr Kevin Scully, executive chairman at equity research house NRA Capital.
Investor appetite for IPOs remains weak in Singapore, as five out of the seven IPOs that have gone through this year in Singapore have lost investors money.
Since the beginning of this year, a total of 40 IPO listings have been pulled globally, compared to 25 for the same period last year.
In the United States, 20 companies have shelved their listings, while Hong Kong and Japan have each seen at least one withdrawal or postponement in the past three months.
With the less than stellar debut of Hutchison Port Holdings Trust last week, analysts are sceptical that coming listings in Singapore will see a favourable investor response in the near term. Perennial China Retail Trust has decided to delay its IPO in Singapore.
Mr Daryl Liew, head of portfolio management at Reyl Singapore, said: "With Hutchison falling 6 per cent from its IPO price on its first day of trading, that's definitely a red flag already because it is a sign that the investor sentiment is probably not there at the current moment."
Mr Liew added: "This is probably why companies will take a bit of time to let the market settle down for investor sentiment to start to turn a bit more positive coming back to the marketplace."
For now, experts say that IPO hopefuls might have to wait until after the second quarter of the year for market sentiment to improve. STELLA LEE
IPO plans take a back seat due to lacklustre market
by Stella Lee 04:46 AM Mar 22, 2011
SINGAPORE - Companies with IPO aspirations are delaying their listing plans both globally and in Singapore due to the current lacklustre market sentiment, with many now adopting a wait-and-watch approach, as the turmoil in the Middle East and the crisis in Japan have made investors nervous.
The MSCI Index for Asia-Pacific declined as much as 8 per cent in only three days after the earthquake struck Japan on March 11. The benchmark fell to its lowest level in almost six months.
This is bad news for companies looking to sell shares for the first time through initial public offerings (IPOs).
"There is no reason for investors to take the risk of an unknown entity which is an IPO against an existing known company in the market," said Mr Kevin Scully, executive chairman at equity research house NRA Capital.
Investor appetite for IPOs remains weak in Singapore, as five out of the seven IPOs that have gone through this year in Singapore have lost investors money.
Since the beginning of this year, a total of 40 IPO listings have been pulled globally, compared to 25 for the same period last year.
In the United States, 20 companies have shelved their listings, while Hong Kong and Japan have each seen at least one withdrawal or postponement in the past three months.
With the less than stellar debut of Hutchison Port Holdings Trust last week, analysts are sceptical that coming listings in Singapore will see a favourable investor response in the near term. Perennial China Retail Trust has decided to delay its IPO in Singapore.
Mr Daryl Liew, head of portfolio management at Reyl Singapore, said: "With Hutchison falling 6 per cent from its IPO price on its first day of trading, that's definitely a red flag already because it is a sign that the investor sentiment is probably not there at the current moment."
Mr Liew added: "This is probably why companies will take a bit of time to let the market settle down for investor sentiment to start to turn a bit more positive coming back to the marketplace."
For now, experts say that IPO hopefuls might have to wait until after the second quarter of the year for market sentiment to improve. STELLA LEE
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