South-East Asia IPOs outperform to hit US$9.8bil as of mid-November, says Deloitte

KUALA LUMPUR, Nov 25 (Bernama): South-East Asia's initial public offering (IPO) proceeds, as of mid-November, have continued to grow even as the region is still battling the Covid-19 pandemic, with US$9.8 billion (US$1=RM4.21) in funds raised from 121 IPOs, outperforming the full calendar year 2020.

Deloitte South-East Asia and Singapore disruptive events advisory leader Tay Hwee Ling said compared to the full year 2020, the number of IPOs this year has gone up by 6 per cent with total funds raised rising by 39 per cent. The total IPO market capitalisation grew by 24 per cent to US$ 36.1 billion.

"It is a significant and stunning performance. Capital markets recorded robust IPO activity for the first ten and a half months in 2021, driven by several blockbuster IPOs. In 2021, the average deal size for each IPO seems to be higher and definitely going to be higher compared to last year as well,” she said during a virtual media conference on Deloitte’s perspective on Southeast Asia’s IPO market performance and outlook for 2022 today.

"For the remaining one and a half months, the market is not going to rest. It's going to be a very exciting period before we close the year," she added.

Thailand remains the leader for raising the highest funds from IPOs in South-East Asia for the third consecutive year, with total funds raised at US$4.2 billion in 2021, followed by Philippines with US$2.8 billion while Indonesia raised US$2.3 billion, collectively accounting for 95 per cent of total funds raised across South-East Asia.

Tay said Indonesia has surpassed the US$2 billion mark for the first time, boosted by the first tech unicorn PT Tbk, which raised US$1.5 billion.

The top 15 IPOs in South-East Asia raised US$8.2 billion, accounting for 84 per cent of all funds raised across all Southeast Asia exchanges in 2021.

Deloitte Malaysia disruptive events advisory leader Wong Kar Choon said Malaysia's IPO market has been slowly recovering from the pandemic, with the proceeds raised in 2021 declining to US$180 million from US$490 million last year.

"I think we might have a key reason (for the decline) in that last year we had a major blockbuster IPO in Mr DIY. Having said that, I don't think the decrease in funds raised this year does justice in terms of the vibrancy of the capital market,” he said.

"This year there were some major IPOs, such as CTOS Digital Bhd that actually had an outright offer of sale of RM990 million and RM200 million from the public funds raised, bringing the total amount of funds transacted for this deal to about RM1.2 billion, which is quite impressive considering this is still a pandemic year."

Wong said Malaysia’s IPO market is picking up pace and has remained vibrant with 24 IPO listings to date, compared with 19 listings last year, with the number of IPOs going back to pre-COVID levels, driven by cornerstone investors and an abundance of uninvested capital.

"There is a growing number of technology-based startups that are looking to tap the capital market, especially via special purpose acquisition companies (SPACs) in the US,” he added. "Retail investor interest is expected to remain strong towards the end of 2021, even though average trading volumes have decreased from the peak in 2020."

Elaborating on the outlook for 2022, Wong is optimistic that more companies would be listed in 2022 with the introduction of the Third Capital Market Masterplan by Securities Commission Malaysia, the digitalisation of operations, and the overall recovery of the economy from COVID-19.

"We expect 2022 to be a busy year," he said. - Bernama

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