Data by Deloitte showed that companies in Southeast Asia raised $7.6 billion from 163 IPOs last year, down 43 per cent from a record $13.3 billion from 152 IPOs in 2021. While the number of IPOs had increased, there was a decrease in total funds raised in 2022, which is indicative of a high number of small-sized offerings that year.

This is due to smaller companies proceeding with their IPOs despite the existing economic uncertainties, while bigger players with better leverage are postponing their initial offerings ahead of better market conditions.

The COVID-19 pandemic had spurred a flood of new retail investors interested in the IPO markets and, consequently, there was a boom in the market globally in 2021, with the United States and the United Kingdom witnessing a record amount of funds raised. Southeast Asian capital markets also enjoyed a successful year that year, but momentum slowed in 2022, albeit with the region weathering the crash slightly better with a 43 per cent drop, compared to the 95 per cent and 89 per cent decrease in proceeds in the US and UK respectively.

Tay Hwee Ling, Disruptive Events Advisory leader, Deloitte Southeast Asia and Singapore said, "Just as the world is winning the fight against the pandemic, the reopening of the world economies and borders have fuelled a rise in global inflation from 4.7 per cent in 2021 to 8.8 per cent in 2022, and with that, an increase in the federal interest rate of almost 4 per cent over the course of the year".

"In the face of these macroeconomic factors, the Southeast Asia IPO market has held up considerably well, while we continue to see the growth potential in our economies," said Ling.

In Vietnam, there were 8 successful IPOs recorded in 2022 with raised funds amounting to $71 million. Out of the eight IPOs, six were completed in the first half of the year. Companies and investors were more cautious in the second half of the year due to uncertainties in the global and local capital markets.

Bui Van Trinh, Disruptive Events Advisory Deputy leader at Deloitte Vietnam said,“The focus on IPOs has shifted from real estate to industrial products and consumer businesses. Consumer businesses should continue to play a key role, with some highly anticipated upcoming listings from this sector".

With the current uncertainties, investors, as well as companies, are proceeding cautiously. Vietnam's regulatory bodies have launched several initiatives to promote the transparency of financial information through regulations that encourage a transparent and efficient listing process, and by promoting the adoption of International Financial Reporting Standards.

"We hope that this will boost local and international investor confidence and enhance the attractiveness and vibrancy of Vietnam's capital market," said Trinh.

Thailand saw the highest IPO funds raised among the Southeast Asian exchanges, with a total of $3.6 billion raised by 42 IPOs in 2022. Nearly 90 per cent of the raised capital was from the second half of the year as restrictive COVID-19 measures eased. The amount raised was similar to the amounts raised in 2017 to 2019 (close to $3 billion each year), perhaps a sign that things are back to pre-pandemic levels. In the exceptional pandemic years of 2020 and 2021, the amount raised was more than $4 billion each year.

Indonesia saw $2.4 billion in funds raised by 59 IPOs last year, maintaining its position in the top two IPO markets in Southeast Asia. PT GoTo Gojek Tokopedia Tbk (GoTo) single-handedly accounted for $1.1 billion of that, taking the top spot on the region’s leaderboard in 2022. PT Global Digital Niaga Tbk, (BliBli), came in second with $508 million raised. GoTo and BliBli join a growing group of tech companies in Indonesia that have listed in recent years.

The Philippines saw a total of eight listings last year, which raised a total of $352 million. The largest listing of the year was by Citicore Energy REIT Corp which raised $124 million, which is the country’s first real estate investment fund (REIT) in the energy sector.

The Malaysian IPO market saw a 138 per cent increase in funds raised on-year, with US$801 million in 2022. This surge was driven by demand for companies with good fundamentals. In particular, the number of ACE listings more than doubled last year from 11 in 2021 to 26, which is impressive given the economic climate.

Singapore saw 11 IPOs raise $428 million in 2022, comprising three Special Purpose Acquisition Companies (SPAC) listings that raised $389 million and eight Catalist IPOs that raised US$39 million. It is a positive start to the SPAC framework introduced in Singapore in almost two years ago. SPACs in Singapore have a 24-month deadline to de-SPAC, with the option to seek a 12-month extension. It is expected that successful de-SPACs will encourage more SPAC listings to come onboard.

Regarding an overall outlook for the Southeast Asian market in 2023, Ling said, “There is still room for high growth in Southeast Asia, as the region re-emerges from the pandemic mindset. While valuations may generally be lower for tech companies now, the ones with solid business fundamentals will still be able to achieve optimal market valuation and benefit from the capital markets."

Source: VIR