New rules that increase bidding premiums, plus persistently low valuations may not derail the delistings trend in Singapore. 2019 hit a three-year high with an average of two companies a month stepping off the exchange.
The 14 companies undergoing privatization or in the process of being bought out this year was the highest figure since 2016, according to a recent DBS report.
Newly tweaked rules at the Singapore exchange have further empowered minority shareholders and increased the premium for bidders to take over companies. This may not dampen the appetite of various investors to take companies off the exchange due to persistently low valuations with the Strait Times Index trading at a one-year forward price-to-book ratio of 1.13, lagging behind the MSCI ASEAN Index’s 1.71.
Ripe for delisting
Onlookers do not expect a slowdown in listing despite a concurrently strong IPO year that has thus totaled $1.7 billion raised, more than that of the entire 2018.
According to a «Bloomberg» (paywall) report, five companies are named as «ripe for potential delistings»:
SIA Engineering Co. (engineering); Unusual Ltd. (events and PR); Fu Yu Corp (plastic components manufacturing).; Frencken Group Ltd. (diversified industrials) and; The Hour Glass Ltd. (watch and jewelry).
