NTT DC REIT’s flat trading debut shows Singapore’s struggle to revive a ‘lackluster’ stock market

Finance·SingaporeNTT DC REIT’s flat trading debut shows Singapore’s struggle to revive a ‘lackluster’ stock marketBy Lionel LimBy Lionel LimAsia ReporterLionel LimAsia ReporterLionel Lim is a Singapore-based reporter covering the Asia-Pacific region

Ore Huiying—Bloomberg via Getty ImagesNTT DC REIT’s IPO was supposed to be a shot in the arm for Singapore’s flagging equity market, decried by analysts as “lackluster” due to its lack of growth stocks and tiny number of listings

NTT’s IPO had everything: It was overd, boasted sovereign wealth fund GIC as a cornerstone investor, and was tied to the buzzy data center sector

On the other hand, “Singapore’s lack of growth oriented, representation in the STI has led it to trail the Hang Seng

The evidence shows has led to descriptions of the market as lackluster,” Thilan Wickramasinghe, Singapore head of re at Maybank Investment Banking Group, says (an important development)

Singapore has had just three IPOs so far this year, including a July 14 listing from NTT DC REIT, whose s started trading on Monday, in light of current trends

Furthermore, Hong Kong, by comparison, has had more than 40 IPOs

The data indicates that NTT DC REIT IPO was meant to give investors a way to tap into AI-fueled demand for data centers, and give Singapore’s equity market a much needed boost

In contrast, Instead, it may end up showing just how much work still needs to be done

NTT DC Reit’s listing NTT DC REIT consists of six data centers

Moreover, Four are based in the U

Furthermore, , with one in Northern Virginia—the world’s largest data center market—and three in Northern California

One data center is in Vienna, a fast-growing data center market (which is quite significant), given the current landscape

The last is in Singapore, the second-largest data center market in Asia-Pacific after China, considering recent developments

Data centers are key to running AI applications

This analysis suggests that se specialized data centers vide the computational power and digital data storage capacity that’s needed to train the ever increasingly complex AI applications

At the same time, AI applications, large language models, rely on massive amounts of data for training and operation

Singapore has long been a regional data center hub due to its infrastructure, lack of natural disasters, and its position as a key node for subsea cables (fascinating analysis)

Generative AI requires massive amounts of computing power, both for training and inference, which in turn has sparked a boom in data center investment

NTT hopes to capture that need for data center capacity, using the ceeds from its listing to continue growing its data center

Asia-Pacific attracted $15, amid market uncertainty. 5 billion in data center investments last year, more than any other region in the world according to the real estate consultancy Knight Frank

Moreover, Singapore’s equity market Doug Adams, CEO for NTT Global Data Centers, explained that the company picked Singapore due to its appreciation for data centers. “The Singapore market is a great market for data centers in general, and we believe the best market in the world for data center Reits,” Adams said in an interview on CNBC International on Monday

On the other hand, “In Singapore, they appreciate a global set of assets and they look for a drip of assets over time, which is what we’re looking to achieve for our portfolio. ” GIC, Singapore’s sovereign wealth fund, is one of the IPO’s cornerstone investors

Nevertheless, The country’s stock market is often criticized as boring or illiquid, with the sectors perty, conglomerates and the three big local banks dominating the SGX

Poor liquidity weakens investor sentiment, which then leads to lower valuations or even fewer listings

While Singapore’s exchange struggles, Hong Kong’s is surging, which Wickramasinghe credits to the “DeepSeek moment” and Beijing’s -growth stance

Lorraine Tan, director of equity re for Asia at Morningstar, notes that Hong Kong’s market is also rebounding from years of poor performance, making the market “relatively cheap in valuation terms. ” She adds that the surge in Hong Kong IPOs could also be due to Chinese regulators giving their apval for mainland companies to list in Hong Kong

Recent blockbuster IPOs in Hong Kong include appliance maker Midea Group, ice cream giant Mixue, and insurer FWD Group

Other giants automaker Chery, AI startup Minimax, Malaysian aviation firm Capital A and fast fashion platform Shein are reportedly considering Hong Kong IPOs

Hong Kong is now set to be the world’s top IPO destination this year, according to S&P Global Market Intelligence Data, in this volatile climate

Still, Wickramasinghe is optimistic that Singapore’s policy reforms should help the market “shed its lackluster image going forward. ” “The recent listing of NTT DC Reit is an early signal of returning listings

We expect this momentum to accelerate going into H2,” Wickramasinghe says.