Global IPO market half the size it should be: SGX CEO
The global market for initial public offerings (IPOs) is nearly half the size it should be, the CEO of the Singapore exchange (SGX) Magnus Bocker told CNBC.
"There is no doubt… we have a slowdown in IPOs. If you look long term we are nearly down 40-50 percent," said Bocker, referring to the projected annual growth rate for 2013.
According to Bocker, looking at IPO rates on a historical basis, the global IPO market is falling well short of its projected growth rate this year.
"If you go back to 1990 to 2000 there was a little less than 2,000 IPOs in the world per annum, then in the next ten years we had about 2000 to 2200," he said.
"We should probably be at 2,300 to 2,400 [per annum] for the next ten years. So if you take that as a measure and look at it now, we are at a run rate of around 1,000 to 1,200. I would say we are 40-50 percent down," said Bocker.
Appetite for new company listings on global stock markets has waned in recent times as volatile market conditions put investors off.
(Read More: Asian IPOs brave choppy markets)
In the first half of 2013, the number of companies to list on Asian stock exchanges nearly halved from 209 (worth $24 billion) to 111 (worth $16 billion), according to Ernst & Young. And in recent months, several firms have delayed launches or adapted their IPO strategies in a bid to try and attract investor interest.
But Bocker said one bright spot for Asia was that the percentage of global IPOs taking place in the region is growing.
"Ten years ago 30 percent of IPOs took place in Asia, but in the last 10 years, 40-50 percent of global IPOs taking place in Asia," he added.
Furthermore,the pipeline of small and medium sized companies coming to market is growing, said Bocker, and overtaking appetite from larger companies.
Bocker said he expects to see an influx of Real Estate Investment Trusts (REITs) coming to market in the near future.
On Wednesday, Singapore's IPO market got a boost from the debut of Singapore Press holdings' Real estate investment trust (Reit). The IPO featured 308.9 million shares at 90 cents each, raising a total of $504 million. The public tranche of about 84 million units was 25 times subscribed, the Straits Times reported.