An investment banking modeling test bank for Hong Kong and Singapore is the specific set of case formats, mechanics, and regional quirks banks use to assess whether you can build and defend valuation under local rules. A modeling test is a timed assignment where you turn partial IFRS financials and sparse transaction facts into a clean, auditable model and a short deck. The core skill is judgment under pressure, not keyboard speed.
Banks want a model that stands up to scrutiny and a set of outputs a VP can send upstream without rework. The bar is practical: respect IFRS-based accounting, local deal mechanics, and Asia financing benchmarks, then explain your assumptions in plain English. The goal is decision-useful, banker-ready work product. Speed matters, but accuracy and judgment win offers.
What banks test – and why it matters
Examiners design tests to reveal your technical control and regional awareness. They care less about a sprawling build and more about focused outputs that match how deals actually get done in Hong Kong and Singapore.
- Three-statement build: Build a linked three-statement model that reconciles, supports circularity, and includes simple sensitivity toggles.
- Local frictions: Capture Hong Kong stamp duty at 0.10% per side and Singapore share transfer duty at 0.2% in sources and uses. Include exchange levies in ECM if provided.
- Security sold: Price the instrument actually raised in Asia – common equity, stapled units, business trusts, or perpetuals – and show why that choice fits the case.
- Cost of capital: Anchor financing to SORA for SGD and HIBOR or HONIA for HKD. Match tenor and amortization to local loan markets.
- Banker-ready outputs: Deliver an on-time memo and a 6 to 10 slide deck with valuation, ownership, sensitivities, and risks.
Accounting anchors that move valuation
Hong Kong and Singapore standards align with IFRS. That alignment changes EBITDA, cash flows, and comparability in ways that can break a test if ignored.
- IFRS 16 leases: Most leases sit on balance sheet. EBIT includes lease depreciation and interest includes lease interest, while EBITDA excludes both. Separate lease depreciation and lease interest so you do not double count in cash flows or multiples.
- IAS 40 investment property: Fair value changes run through the P&L. In REIT or property cases, strip fair value gains from EBITDA and model cash yields explicitly.
- IAS 36 impairment: Amortization of finite-lived intangibles hits EBITA; goodwill is impairment-tested. Normalize non-cash impairment and revaluation before comps.
- IFRS 10 and 12 consolidation: Equity-accounted JVs sit below EBIT. Exclude them from EBITDA unless proportionate metrics are requested.
Rates, currency, and debt math that signal credibility
Asia funding references differ from the U.S. and Europe and they show up in every strong submission. Use them correctly to demonstrate local fluency.
- Reference rates: SGD loans reference SORA. HKD loans reference HIBOR or an emerging HONIA path. LIBOR and legacy SOR are out.
- Floating-rate logic: Model period-average debt multiplied by benchmark plus margin. Keep the rate path on a separate input line and avoid SOFR curves in SGD or HKD models.
- Advanced tactics: If a prompt mentions hedging, show a fixed-float mix and reserve full swap cash flow schedules unless asked. For deeper structures, see advanced debt modeling.
Transaction costs and frictions you must include
Put regional costs into uses and label them clearly. These are common grading traps.
- Hong Kong stamp duty: 0.10% of consideration per side effective 17-Nov-2023.
- Singapore stamp duty: 0.2% on the higher of consideration or market value for Singapore-incorporated companies. Public-to-privates usually catch it, but check the corporate form.
- Exchange levies: Immaterial in M&A but reduce ECM net proceeds if provided.
Core case formats and the regional twists
Three-statement model and valuation pack
The standard build includes the income statement, cash flow statement, balance sheet, and valuation pages. Apply regional adjustments and keep outputs crisp.
- Normalization: Strip fair value and revaluation gains from operating metrics and reconcile to cash.
- Lease optics: Present EBIT and EBITDA both pre and post IFRS 16 if comps mix treatments and label which set drives multiples.
- Working capital: Expect contract liabilities and customer deposits under IFRS 15, especially for developers and travel or consumer names. Treat deposits as operating liabilities and model reversals carefully. If you need a refresher, see working capital drivers.
Deliver a one-page valuation summary with an EV bridge, a WACC or discount-rate footnote using local risk-free proxies, and a clear sensitivity grid. Flag FX translation risk when reporting and functional currencies differ. For layout economy, keep trading comps and DCF on separate tabs but with identical output boxes.
Rights issues and placements
Rights issues and accelerated bookbuilds are common in Asia ECM. Mechanics often drive the result more than the headline discount.
- TERP control: TERP = (Old shares × Old price + Rights shares × Rights price) ÷ post-issue shares. Hardcode the formula and use it as an error trap.
- Proceeds clarity: Show gross vs net proceeds and uses like debt prepayment, capex, or M&A. Include underwriting fees when stated.
- Take-up and backstop: Sensitize take-up rates to show who bears dilution and tail risk to free float. Model post-issue EPS and DPS based on explicit payout ratios.
IPO and cornerstone investors
Cornerstones feature in Hong Kong and appear in Singapore. Treat cornerstone demand as a committed tranche that improves coverage and optics.
- Gross-to-net: Build offer size at IPO price minus underwriting and listing costs and split primary vs secondary.
- Governance notes: WVR or VIE do not change cash flow modeling but can affect index inclusion and free float. Include a brief governance footnote if asked.
REITs and business trusts
REIT and trust cases appear frequently, including for credit roles. Start with cash yield, not GAAP earnings.
- From NPI to DPU: Start at net property income, subtract trust-level expenses and manager fees, adjust for straight-lining and non-cash fair value changes, then compute DPU.
- Constraints: S-REITs face a 50% aggregate leverage cap and interest coverage requirements. Sensitize asset values, cap rates, and funding costs to show headroom.
- Valuation: Yield and NAV dominate. For acquisitions, show DPU accretion or dilution under equity vs perpetuals vs debt.
Take-privates and public M&A
Schemes of arrangement are common and general offers occur under local codes.
- Sources and uses: Include consideration, stamp duty, advisory and financing fees, and any rollover equity. Add squeeze-out mechanics and dissent risk to the memo.
- Financing realism: Asia packs skew to bank debt. Structure senior loans at SORA or HIBOR or HONIA plus margin, often with amortization.
- Taxes: There is no broad capital gains tax for sellers in HK or SG. Do not invent tax shields beyond the amortization of financing fees.
Paper LBO
Paper LBOs appear in both HK and SG. The math is standard, but the inputs are not.
- Benchmark discipline: Use SORA or HIBOR or HONIA for floating-rate debt, with conservative margins and exit multiples anchored to local comps. If you need a refresher, this LBO model guide helps under tight time limits.
- FX awareness: When cash flows and reporting currencies differ, include a one-line FX translation risk note rather than a full FX model unless asked.
What you get and what you deliver
Data packs are typically light: a one-page prompt, three to five years of historicals, a few KPIs, and a paragraph on the transaction. IPO and REIT cases may add regulatory constraints.
- Excel: A clean three-statement build, a valuation tab, a scenarios tab, and an outputs tab. No macros. Names are fine but must copy cleanly.
- PDF deck: 6 to 10 slides covering thesis, valuation, assumptions, transaction overview and uses, sensitivities, and risks. For ECM, add pro forma ownership, TERP checks, and cornerstone allocations.
- Memo: Three concise paragraphs on thesis, valuation range, and key risks. No filler.
Mechanics that get graded
Most candidates lose points for avoidable misses in core mechanics. Build these correctly the first time.
- Sources and uses: Segregate buyer cash, rollover equity, management reinvest, debt tranches, equity issued, and fees. Include HK and SG stamp duties where applicable.
- Ownership bridge: Map existing holders, cornerstone investors, underwriting backstops, and employee pools. In rights, show theoretical ex-rights ownership and underwriter dilution.
- Debt schedule: Show opening, draw, amortization, mandatory prepayment if an cash sweep is specified, and interest on average balance at benchmark plus margin. For structure and examples, see a debt schedule primer.
- Cash and WC: Separate contract liabilities and customer deposits. Classify lease principal in financing cash flows and lease interest in operating if you retain IFRS 16 presentation.
Valuation practice and sense checks
Use local inputs and label your lease treatment. Sense checks beat false precision during reviews.
- Multiples: Either compute pre IFRS 16 EBITDA by adding lease expense back or adjust EV for lease liabilities. Pick a lane and stick to it.
- DCF: Use SGD or HKD risk-free rates. If you lack SORA or HONIA curves, use local government bonds as proxies and say so. For workflow tips, use a compact DCF build and skim common DCF mistakes.
- REIT and trust: Price to NAV and DPU yield lead. Show implied cap rates vs peer transactions.
Regulatory touchpoints to acknowledge
Tests rarely ask for legal analysis, but regulators set constraints candidates must respect.
- Takeovers regimes: Hong Kong SFC Codes and Singapore’s Take-over Code govern conduct and thresholds. Cite them for feasibility and acceptance, not for legal argument.
- IPO regime: Hong Kong allows WVR for innovative firms and has a Specialist Tech route. Governance can affect index inclusion and free float.
- REIT frameworks: MAS sets S-REIT leverage and disclosures. Hong Kong REITs follow the SFC Code. Treat caps as hard constraints in scenarios.
- Benchmark transitions: MAS steers markets to SORA and HKMA develops HONIA. Avoid LIBOR and SOR in your model.
Pitfalls that end tests fast
Most early failures come from mixing accounting treatments or skipping known frictions. Avoid the big six.
- Stamp duty misses: Forgetting HK or SG stamp duty on qualifying transfers.
- Lease confusion: Mixing lease-adjusted and unadjusted EBITDA in EV or EBITDA.
- Rights math errors: TERP mistakes and share count misses.
- Property gains: Treating fair value gains as operating.
- Wrong curves: Using SOFR or EURIBOR for SGD or HKD debt.
- Tax inflation: Creating tax shields beyond fee amortization.
Format moves that save time
A lean, pre-wired template converts minutes into quality. Build a few toggles and checks that always travel with you.
- Regional template: IFRS three-statement layout with a lease presentation toggle, SORA and HONIA rate table, and sources-uses shell with stamp duty lines.
- Rights tab: Pre-build a TERP and ownership module. Add error checks that reconcile pre and post rights market cap math.
- Comps splits: Keep comps split into pre and post IFRS 16 sets and label clearly.
- Scenario discipline: Limit to base, downside, and upside and show outputs in one box early in the deck.
Case math to memorize
Simple rules-of-thumb drive accuracy under time pressure. Commit these to memory.
- Rights issue: 100 shares at HKD 10 with 25 rights at HKD 6 gives TERP of 9.2. EPS dilution pre-use is 100 ÷ 125.
- SORA interest: SORA 3.0% plus 250 bps margin equals 5.5%. Interest expense equals average debt times 5.5%.
- REIT DPU: NPI minus manager and trustee fees plus or minus straight-lining and less non-cash fair value changes, divided by units. Equity-classified perpetuals are distributions, not interest.
- Take-private uses: Offer price times shares acquired plus stamp duty plus fees plus debt refi; sources include new debt, rollover equity, and sponsor equity. Add minimum cash if specified.
How HK and SG tests diverge from U.S. or Europe
Expect IFRS lease and property fair value lines to matter more, rights issues and placements to appear frequently, cornerstone allocations to be named, SORA and HIBOR or HONIA to anchor financing, and REITs or business trusts to show up often. Yield, NAV, and DPU accretion tend to beat headline EPS.
Scoring signals that stand out
Reviewers skim first and drill second. Make the skim obvious and the drill rewarding.
- Accuracy: Cash flow reconciles, sources and uses add, share count and ownership match, TERP checks pass.
- Judgment: Regional frictions included, multiples and discount rate are defensible, rights and cornerstone mechanics are modeled correctly.
- Communication: Outputs are decision-useful, sensitivities readable, memo hits thesis and risks.
- Hygiene: No broken links, clean labels, consistent units.
A 90-minute plan that actually works
A fixed plan protects your time. Use it even when the prompt feels unfamiliar.
- 0 to 10 minutes: Read, mark transaction mechanics, set currency and benchmark, note accounting red flags. Plan tabs and outputs.
- 10 to 45 minutes: Build drivers, linkage, working capital, and capex. Implement IFRS 16 presentation. Reconcile cash and balance sheet.
- 45 to 70 minutes: Build sources and uses and the debt schedule with SORA or HIBOR or HONIA. Add stamp duty and ownership if ECM or rights.
- 70 to 85 minutes: Run valuation and sensitivities. For REITs, show NAV and DPU. For ECM, show TERP and cornerstone allocations.
- 85 to 90 minutes: Export slides. Write three thesis bullets and three risks. Sanity-check totals.
Governance and enforcement notes worth one line
Takeovers execution sits under Hong Kong’s SFC Takeovers Panel or Singapore’s Securities Industry Council. State conditions plainly and tie them to feasibility and timetable. For IPOs with WVR or VIE, acknowledge the regime and note governance or index constraints without overworking the model.
What not to do
Skip habits that waste time or create risk without adding decision value.
- Headline taxes: Do not hardcode statutory rates without testing continuity against IFRS adjustments.
- Zero costs: Do not assume away stamp duty or listing costs.
- Macros and fluff: Avoid macros and excessive formatting during the test window.
Quality control checks that catch most errors
Run a quick QC loop before sending. These five checks prevent most dings.
- Balance sheet: It balances and the cash walk ties to the cash line.
- Share math: EPS and share count match the ownership tab and TERP reconciles.
- Lease consistency: EBITDA in EV or EBITDA matches your lease treatment in comps.
- Interest formula: Interest equals average debt times benchmark plus margin. No stray LIBOR.
- REIT logic: DPU excludes fair value changes and leverage headroom vs 50% is explicit.
Takeaways for PE and credit practitioners
If the case is a REIT or infrastructure trust, underwrite cash yield and covenant headroom first, NAV second. For take-privates, emphasize certainty of funds and conditionality; acceptance mechanics and stamp duty shape execution. For rights issues, show who bears dilution under different take-up rates and the logic for choosing rights over an accelerated placement. When in doubt, keep valuation tight and borrow structure from a clean trading comps page and a compact DCF tab.
Closing Thoughts
Hong Kong and Singapore modeling tests reward candidates who pre-wire IFRS, SORA or HIBOR or HONIA, stamp duty, rights math, cornerstone allocations, and REIT or trust economics into their templates. Build only the blocks that influence decisions, state assumptions, and show your work. Reviewers are busy – make it easy for them to say yes. After submission, archive your model and deck with version notes and an input log, and apply a retention policy. Good housekeeping is dull until you need it.