(Repeats to fix technical glitch)
* Follows cancellation of WH Group IPO in Hong Kong
* Asia IPO issuance has doubled to $15.4 bln so far this
By Joyce Lee and Elzio Barreto
SEOUL/HONG KONG, May 2 Lotte Shopping Co Ltd
said it is postponing an up to $1 billion real
estate investment trust listing in Singapore due to unfavourable
market conditions, the second large IPO to be pulled in Asia
Volatile equity markets this year have helped undermine
sentiment for some of the region's less attractive listings, but
Asia-Pacific IPO markets as a whole are still expected to have
an upbeat 2014. Issuance for the year so far has doubled to
$15.4 billion over the same period a year earlier.
"People are just being more tactical," said Keith Pogson,
managing partner for financial services at consultancy EY in
"If we can see sensible valuations, where investors believe
they can get some safety in terms of rewards for taking the IPO
risk in getting involved, I think we will see plenty of deals
flying out the door."
Lotte Shopping's postponement follows the cancelling of
Chinese pork giant WH Group Ltd's Hong Kong IPO, even
after it cut the offer size by two-thirds to up to $1.9 billion.
In addition to market volatility, rich valuations and negative
publicity over executive compensation also helped scupper the
The operator of South Korea's largest department store
chain, said it may reconsider an IPO for the REIT if market
conditions improve, but is currently looking at a sale and lease
back deal through a local public real estate fund as an
The MSCI Asia ex-Japan stock index has been
on a roller coaster ride for much of the year, losing as much as
7 percent in early February but recovering in March. It is now
up 1.5 percent for year to date.
Among Asian IPO markets, Singapore in particular has
struggled in recent years as most big-ticket listings in Asia
opt for Hong Kong where there is more robust demand from Chinese
and international investors.
REIT listings had been one of the few bright spots for
Singapore though expectations for higher interest rates as the
U.S. Federal Reserve unwinds its massive stimulus programme have
helped temper demand.
"Investors are generally skittish about investing in REIT
IPOs on fears that interest rates are headed higher and growth
opportunities in the market across most property segments are
muted," Pratik Ray, senior property analyst at HSBC in
For the year to date, some 38 initial public offerings have
been cancelled or withdrawn in the region while 138 deals have
been completed, Thomson Reuters data showed. For the whole of
2013, 75 were cancelled or withdrawn while 407 were completed.
This year the reopening of equity markets in mainland China
after a 14-month hiatus and increased activity in Hong Kong is
set to boost listings in the region, although initial
expectations for a boom in China IPOs are being scaled back
somewhat as regulators have taken a cautious approach to
Australia and New Zealand have also had a bump in new
listings, helped in part by the sale of government or state
In contrast, IPOs in Singapore have had a slow start, with
just $773.6 million of deals so far this year compared to $2.46
billion over the same period in 2013.
In Thailand, due to political turmoil, volumes have plunged
to $485.9 million for the year to date from $2.18 billion
for the same period last year.
(Additional reporting by Saeed Azhar in Singapore; Editing by