Volatility in the financial markets and uncertainty in the global economy arising from the Covid-19 pandemic continued to impact investment banking revenues, as declines were seen across all major investment banking revenue lines.

The industry registered $233.9 million in fees in Singapore in the first half of the year – a 49.4 percent drop compared to the same period last year, according to financial market data provider Refinitiv.

Advisory fees for completed M&A totaled $43.7 million in 1H 2020, down 66.9 percent year-on-year, while equity capital markets (ECM) underwriting fees fell 6.6 percent from a year ago to $89.9 million. Debt capital markets (DCM) underwriting fees declined 55.3 percent to $45.9 million, and syndicated lending fees declined 58.4 percent for the same period from a year ago and generated $54.4 million, Refinitiv said in its preliminary review for Singapore’s investment banking activity in the first half of 2020, published on Friday.

DBS topped the fee league table with $56.7 million or 24.2 percent of the total pool. Morgan Stanley ($24.2 million) ranked second in the period, followed by Goldman Sachs ($20.3 million), UOB ($13.4 million) and Credit Suisse ($9.7 million).

Largest Singapore Deal

Singapore-announced M&A activity was 44.1 percent lower than the first half of 2019, at $37.8 billion. In fact, the last month (May 2020) was the lowest monthly total for Singapore involvement in M&A activity since February 2019. Singapore-targeted M&A activity amounted to $22.7 billion, a 3.3% decline compared to the same period in 2019, but domestic M&A in Singapore hit a record semiannual period, with a total of $18.2 billion, up 31.6 percent from a year ago, as the period saw the largest domestic Singaporean deal on record: the merger of CapitaLand Mall Trust and CapitaLand Commercial Trust, valued at $7.998 billion.

The Real Estate sector saw the most deal making, with 46.5 percent market share at $17.6 billion, while Industrials took second place, with 24.4 percent market share, followed by Energy & Power with 5.3 percent market share. 

IPOs Down

ECM issuance by Singaporean companies raised $3.7 billion so far in 2020, or 8 percent lower than the same period last year. Follow-on offerings fell 33.2% from the comparative period last year, with US$1.9 billion worth of proceeds, while convertible bond offerings reached $1.1 billion, a significant increase from last year’s US$154.6 million proceeds. 

Initial public offerings (IPOs) by Singaporean companies raised $635.6 million, down 31.8 percent in proceeds year-on-year, with the largest IPO so far being Elite Commercial REIT, at $170.5 million. Industrials accounted for 49.6% of Singapore’s ECM proceeds, driven by capital raisings from Singapore Airlines.

Primary bond offerings from Singapore-domiciled issuers fell 35.5 percent from the same period last year, raising $11.0 billion, which is the lowest first-half level since 2013 ($9.8 billion). During the period, companies from the Financials sector captured 55.6 percent market share ($6.1 billion), down 31 percent from the same period last year, followed by Real Estate with 13.2 percent market share ($1.4 billion), down 40.9 percent from a year ago.