Singtel’s NetLink makes debut slightly above offer price

SINGAPORE: NetLink NBN Trust, the broadband unit of Singapore Telecommunications (Singtel), rose slightly above the offer price in its market debut in an IPO that is the largest the city-state has seen in four years.

The US$1.7bil offering also propelled total listings in terms of money raised to a multi-year high in the country.

The IPO is a shot in the arm for the Singapore Exchange (SGX), which has been promoting itself as a centre for real estate investment trusts (REITs) and business trusts with larger Chinese firms from other sectors still favouring the higher valuations and liquidity of Hong Kong.

NetLink opened trading at S$0.815 per unit before edging down to S$0.810 on its first day of trade.

It had offered 2.9 bil units in the IPO at S$0.81 apiece, raising about S$2.3bil. Singtel owns 24.99% of NetLink after the IPO.

“As a business trust, the future cashflow is predictable, so there is a lack of imagination on this kind of IPO,” said Margaret Yang, a market analyst at CMC Markets, Singapore.

Investors may also not find NetLink’s projected yield of 5.4% that attractive, she said.

The listing is the biggest since Mapletree Greater China Commercial Trust’s 2013 offering raised US$2.06bil, according to Thomson Reuters data.

NetLink’s listing brings the total amount raised via IPOs to about US$2bil in Singapore this year, Thomson Reuters data shows, versus last year’s US$1.7bil. This is the highest since at least 2014 when companies raised US$2.56bil.

Listings in the first six months included recruitment firm HRnetGroup Ltd and Dasin Retail Trust.

Shares of companies that listed over the period had risen 40% on average from their offer price, as of June 30, according to consultancy Deloitte Singapore.

“The strong post-IPO performance of the companies ... will continue to drive positive market sentiments,” Ernest Kan, deputy managing partner (markets) at Deloitte, said last week.

More IPOs can be expected in the next five months, he added.

The SGX has been considering several initiatives to shore up listings and liquidity.

In May, it partnered with the city-state’s technology and media regulator to facilitate accredited companies to list on the exchange.

The exchange is also in the process of deciding whether it should introduce dualclass share listings. — Reuters