Singtel's NetLink debuts slightly above offer price (updated)

NetLink NBN Trust

19/07/2017 09:42

* IPO was priced at S$0.81 per unit 
    * Singtel owns 24.99 percent of NetLink after IPO 
 
 (Adds analyst comments, updates prices) 
    SINGAPORE, July 19 (Reuters) - NetLink NBN Trust  NETL.SI , 
the broadband unit of Singapore Telecommunications  STEL.SI  
(Singtel), rose slightly above the offer price in its market 
debut on Wednesday in an IPO that is the largest the city-state 
has seen in four years.  
    The $1.7 billion 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 
 SGXL.SI  (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.  urn:newsml:reuters.com:*:nL4N1F12EB 
    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 billion units in the IPO at S$0.81 
apiece, raising about S$2.3 billion. Singtel owns 24.99 percent 
of NetLink after the IPO.  urn:newsml:reuters.com:*:nL4N1JY3L5      
    "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 
percent that attractive, she said. 
    The listing is the biggest since Mapletree Greater China 
Commercial Trust's  MAPE.SI  2013 offering raised $2.06 billion, 
according to Thomson Reuters data.  
    NetLink's listing brings the total amount raised via IPOs to 
about $2 billion in Singapore this year, Thomson Reuters data 
shows, versus last year's $1.7 billion. This is the highest 
since at least 2014 when companies raised $2.56 billion. 
    Listings in the first six months included recruitment firm 
HRnetGroup Ltd  HRNE.SI  and Dasin Retail Trust  DASI.SI . 
    Shares of companies that listed over the period had risen 40 
percent 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 dual-class share listings.  urn:newsml:reuters.com:*:nL5N1GG255 
    ($1 = 1.3684 Singapore dollars) 
 
 (Reporting by Aradhana Aravindan; Editing by Himani Sarkar) 
 ((aradhana.aravindan@thomsonreuters.com; +65 6403 5659; Reuters 
Messaging: aradhana.aravindan.thomsonreuters.com@reuters.net)) 
 
Keywords: NETLINK TRUST LISTING/