As activity in the Singapore equity capital markets (ECM) picked up this year, banks have generated higher underwriting fees so far amounting to US$54.7 million, representing an increase of 73.6% compared with 2017. The same is true with debt capital markets (DCM), with banks generating higher fees of US$86.7 million, up 35.5% from a year ago.

Figures provided by Thomson Reuters on 14 June show that DBS Group leads the fee ranking for Singapore equity issuance with US$16.6 million in estimated fee revenue for a wallet share of 30.3%. The amount was up 114.1% from the fees it earned in the comparable period of 2017. Citi was the second biggest fee earner with US$9.9 million for a wallet share of 18.1%, followed by HSBC with US$6.4 million (11.6%), CITIC US$3.8 million (7%) and Bank of America Merrill Lynch US$2.9 million (5.2%).

DBS also captured the biggest wallet share in DCM at 14.8% even as it generated lower fees of US$12.9 million so far in 2018, which were down 21.5% from the same period a year ago. HSBC has the second biggest wallet share at 6.1% with fees of US$5.3 million, followed by Standard Chartered with 5.9% (US$5.1 million), Credit Suisse 5.8% (US$5 million) and Oversea-Chinese Banking Corp 5.5% (US$4.8 million).

The higher ECM underwriting fees are driven by the bigger volume of fund raising by Singapore corporates, which raised the equivalent of US$2.56 billion this year – or up 128.4% compared with the proceeds of US$1.12 billion in 1H 2017.The number of ECM issuances also grew from 26 to 35 during the period.

In 2Q 2018 alone, ECM activity grew as the proceeds amounted to US$1.6 billion, up 81.2% from 1Q 2018 and three times the proceeds raised in 2Q 2017.

Initial public offerings (IPOs) by Singapore companies in domestic and overseas stock markets raised US$467.1 million from 13 issues so far this year, up 81% in proceeds compared with US$258 million from 10 issues last year. Follow-on offerings from Singapore issuers raised US$1.86 billion in proceeds, a 115.6% increase from US$861.7 million in the comparative period of 2017 as number of issuances picked up 25%.

Follow-on offerings accounted for 72.6% of Singapore ECM activity so far this year, while IPOs captured 18.3% market share in terms of proceeds. Convertible offerings accounted for the remaining 9.1% market share with proceeds of US$232.8 million from two transactions.

The biggest ECM fund raising done so far by the Singapore corporates was the follow-on offering by Frasers Logistics & Industrial Trust (FLT) in June amounting to US$355.9 million, followed by the IPO of Sasseur Reit which raised US$300.7 million in March.

But it was Kakao Corp, a South Korean messaging app operator, which arranged the biggest equity fund raising in the Singapore market so far this year amounting to US$1 billion from the sale of global depository receipts in January.

In DCM, primary bond offerings from Singapore-domiciled issuers amounted to US$14.41 billion so far in 2018, according to Thomson Reuters. This represented a minimal increase from US$14.31 billion in the same period a year ago as local corporates accessed both the domestic and offshore bond markets to raise capital.

Singapore issuers raised US$4 billion from the US dollar bond market, up 8% in proceeds compared with the same period of 2017 despite a 40% decline in the number of issuances.

United Overseas Bank is the most active issuer in terms of bond proceeds so far this year with US$2.6 billion (including issuance from subsidiaries). In April, the bank priced a dual tranche bond offering totaling US$1.2 billion, comprising of a US$700 million three-year fixed rate bond and a US$500 million three-year floating rate note. This is the biggest bond deal from a Singapore issuer so far in 2018.

The Singapore dollar bond market, meanwhile, manifested a slowdown in activity in 2Q 2018 as issuance volume fell 63.9% to S$2 billion from the previous quarter. This brings to S$7.5 billion the total Singapore dollar bond volume so far this year, or 41.9% lower compared with proceeds raised in 1H 2017.

The S$1.2 billion bond deal in March by Land Transport Authority is the biggest Singapore dollar bond transaction so far in 2018. The state-owned Housing and Development Board continued to tap the local bond market with three primary issuances totaling S$1.6 billion in proceeds.