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Singapore’s IPO Market: Mapletree Turns the Heat Up

The Dow Jones Industrial Average set multiple new all-time (nominal) highs this week, while the S&P 500 now sits just below its all-time high; however, the Singapore market was roughly flat on the week, with the Straits Times Index (SGX: ^STI) down just 0.1%. That performance was still better than several of the major Asian markets:

 

Weekly Gain (Loss)

Price-to-Earnings (Mar. 15)*

Nikkei 225 (INDEX: ^N225)

+2.3%

16.3

Hang Seng Index (INDEX: ^HIS)

(2.4%)

13.5

Shanghai Stock Exchange Composite Index

(1.7%)

22.3

BSE Sensex

(1.3%)

17.8

*Normalized earnings per share. Source: S&P Capital IQ

New listings: Opening the tap
While some of the main property shares may have gotten burned last week, that did not prevent a highly successful listing of China-focused, Temasek-backed REIT Mapletree Greater China Commercial Trust (SGX: RW0U) on the Singapore Exchange on Mar. 7. The shares priced at S$0.93, which was the top of their indicative range – not surprisingly, with institutional investors requesting 37 times the number of available shares! The shares gained 11% on their first day of trading and are now 14% above their initial public offering (IPO) price. The IPO, which raised S$1.6 billion, was the largest in Asia this year.

At the end of February, I highlighted the positive outlook for new listings in Singapore and Mapletree’s successful launch adds momentum to that trend. It was almost certainly a factor in prompting Singapore Press Holdings (SGX: T39) to announce last Sunday evening that it was considering listings its property assets in a REIT. On Monday, the publisher’s shares gained 3.4% and they were up 8.4% this week (the best performance among Straits Index components), establishing a new 52-week high in the process.

In principle, new listings are no bad thing – they simply mean a greater diversity of issues and assets for public market investors to choose from. However, individual investors need to keep in mind that investment bankers don’t float companies when valuations are depressed. Value-conscious investors should carefully assess each issue on its merits and decide whether or not to participate by comparing the business value on offer relative to the asking price.

Enjoy your weekend, Singapore! Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.  The Motley Fool’s purpose is to help the world invest, better.

This article was written by Alex Dumortier, CFA. Alex Dumortier is a Fool.com contributor.  

The Motley Fool’s purpose is to help the world invest, better. The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  

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