South-East Asian IPOs show tentative revival


  • Markets
  • Thursday, 30 Jul 2020

In Malaysia, home improvement retailer Mr DIY has re-started the process for its up to US$500mil IPO, boosted by business recovery, sources familiar with the deal said.

SINGAPORE: A handful of companies from the technology and consumer durables sectors are aiming to launch initial public offerings (IPOs) in South-East Asia later this year, pointing to an upturn after pandemic-hit markets and weak economic growth slashed fundraising.

In Malaysia, home improvement retailer Mr DIY has re-started the process for its up to US$500mil IPO, boosted by business recovery, sources familiar with the deal said.

The company declined to comment and the sources declined to be named due to confidentiality.

Earlier this month, Philippine fibre broadband services provider Converge ICT Solutions filed for an IPO of up to US$725mil, cashing in on a surge in home working.

It held up to 50 meetings with investors this month to chart demand for the deal, one source said.

AREIT, the Philippines’ first real estate investment trust, is also raising US$275mil.

Activity is picking up in the region after grinding to a halt in the first quarter.

“IPOs which had been planned before the pandemic are just waiting for the right moment to come back, ” said Tham Tuck Seng, capital markets partner at PwC in Singapore.

“We’ve seen heightened interest from healthcare issuers to list, as the sector has become more important, ” he said, also highlighting interest from consumer-tech firms.

Total fund-raising from IPOs in South-East Asia has fallen to US$1.4bil so far this year from US$2.9bil a year ago, Refinitiv data showed.

This excludes US$3bil raised by Thailand’s Central Retail in February.

The Hong Kong market has started to heat up again with US$38bil raised this year in IPOs and secondary listings, according to Dealogic.

Sources cautioned that a pullback in global markets in recent weeks could still delay listings by South-East Asian companies, but launches were being readied for later this year.

The Philippines’ equity index has dropped 25% so far this year, while Indonesia is down 19% and Thailand has lost 15%.

In Thailand, Siam Cement Group’s packaging subsidiary is testing investor appetite for its US$1bil IPO, likely in the fourth quarter, which was shelved in March as markets were roiled by the epidemic, sources said.

The company did not respond to a Reuters query.

Malaysia’s Mr DIY had put its IPO on hold in March just before the country went into a lockdown. “The push towards the IPO is because the company’s business recovery has been so fast, ” said one source. — Reuters

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