Singapore’s economy is reliant on international trade, and challenging global macroeconomic conditions are having an impact on growth. Its economy grew by just 2% in 2015, representing its weakest performance since 2009, and the Ministry of Trade and Industry recently forecast that growth would remain sluggish in 2016 to between 1% and 2%. A combination of factors are attributable to this trend, including an ongoing slowdown in the Chinese economy, global financial markets volatility and falling commodity prices.
In the capital markets arena, although the Asia Pacific region dominated in IPO activity globally, there were only 13 IPOs in Singapore in 2015, of which only one was a mainboard listing, while the remainder were Catalist listings. In 2014, by comparison, there were 30 IPOs, of which 12 were mainboard listings. Dealogic data indicates that, in the last 10 years, Singapore has raised only a tenth of the IPO capital that Hong Kong has. Also, exchanges in Malaysia and Indonesia have become increasingly active.
On a more positive note, M&A deal flow in the wider Asia-Pacific region was strong in 2015, and also in the first quarter of 2016, a significant proportion of which was generated by Chinese outbound transactions. According to data compiled by Duff & Phelps, there were 591 pure M&A deals in Singapore in 2015 (with a total value of $101.2bn), compared with 346 M&A deals in 2014 (with a total value of $50.7bn).
Elsewhere, Singapore is a hub for international arbitration; the Singapore International Arbitration Centre recently announced that it had received 271 cases in 2015, representing an increase from 222 new cases filed in 2014. 42% of cases heard had no connection with Singapore. The Singapore International Commercial Court, which opened in January 2015, issued its first judgment in May 2016 in a cross-border joint venture dispute involving Australian, Indonesian and Singaporean parties.
Published in 2017 at https://www.legal500.com for The Legal 500 Asia Pacific 2017