Southeast Asia IPO proceeds buck downtrend to hit US$6.4bil as of mid-Nov


KUALA LUMPUR: Total initial public offering (IPO) activity across Southeast Asia as of mid-November this year bucked the overall downward trend to inch up to pre-COVID-19 levels, with US$6.44 billion (US$1=RM4.09) in funds raised from 100 IPOs.

Deloitte Southeast Asia and Singapore disruptive events advisory leader, Tay Hwee Ling, said compared to full-year 2019, the number of IPOs fell 38 per cent from 161 and total IPO proceeds slipped 12 per cent from US$7.34 billion, but the total IPO market capitalisation this year increased by three per cent to US$25.96 billion.

Malaysia, Thailand and the Philippines saw year-on-year increase in IPO funds raised.

"Capital markets stayed resilient despite a host of uncertainties from the evolving global health crisis to the worsening United States-China trade tensions and the impact of the US presidential elections,” she said during a virtual media conference on Deloitte’s perspectives on Southeast Asia’s IPO market performance and outlook for 2021 today.

Thailand remains in number one position in the region with the highest funds raised across Southeast Asia at US$3.94 billion as of Nov 15. Taking the top two spots on the region’s leaderboard are Central Retail Corporation Public Company Limited and SCG Packaging Public Company Limited with US$1.77 billion and US$1.27 billion funds raised, respectively.

Indonesia was responsible for 46 IPOs in the first 10.5 months of 2020, which accounted for the highest number of IPOs across Southeast Asia.

For Malaysia, Deloitte Malaysia disruptive events advisory leader Wong Kar Choon said Bursa Malaysia scored the biggest boost from the listing of MR D.I.Y. Group (M) Bhd which raised US$362 million, making it the largest listing in three years, while new listings fell to 18 this year compared with 30 listings last year.

"The average trading volume increased by about 86 per cent and 208 per cent for the second and third quarters of 2020 as compared with the same quarters in 2019.

"The high trading volume with buying momentum should remain strong where investors are generally looking at stock-specific (investments) rather than sectors, especially those related to technology and healthcare,” he said.

The Movement Control Order and pandemic also created positive elements on the capital market, he said, noting that the funding from the government helped protect the livelihoods of many people and also became opportunities to access funds and do trading.

Elaborating on the COVID-19 challenges and outlook for 2021, he said the region would continue to see growth and he expected an upswing in listings as soon as a vaccine was proven safe and effective.

"COVID-19 has made companies reevaluate their business and growth forecast while looking into opportunities to raise funds from stock markets to support their growth and stay resilient in this challenging climate,” he said.

Wong added that the growth potential for real estate investment trusts (REITs) across the Southeast Asia region was also promising, given the region’s population and urbanisation-led growth trends.

"Certain industries and companies are doing well, such technology, gloves and pharmaceutical, and there will be a lot of companies coming in through digital platforms with planning for three-year strategies,” he said. - Bernama

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Southeast Asia , IPO , listing , Deloitte , Tay Hwee Ling

   

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