Thailand and Singapore emerge top performers in total funds raised via IPOs in South-east Asia: Deloitte

THAILAND is the top performer in South-east Asia with the largest total funds raised through initial public offerings (IPOs) in 2019, accounting for 39 per cent. Singapore contributed 33 per cent to the total funds raised, followed by Indonesia.

The Stock Exchange of Thailand netted US$2.63 billion in IPO proceeds as of Nov 15, making it the biggest market for IPOs in South-east Asia. This was thanks to the listing of Asset World Corp Public Company Limited, which topped the South-east Asia leaderboard with US$1.38 billion funds raised. This marks the third consecutive year that Thailand has raised more than US$2 billion from IPO listings.

Meanwhile, Singapore's initial public offering market saw a four-time increase in funds raised this year notwithstanding the deferral of several IPOs on the Singapore Exchange (SGX), with companies citing timing issues as economic uncertainties continue to weigh in.

As at November 15 2019, the SGX raised a total of US$2.26 billion in IPO proceeds from 11 IPO deals as compared to US$551 million raised from 15 IPO deals last year.

South-east Asia raised a total of US$6.8 billion through 138 IPOs in the first 10.5 months of 2019, just shy of the US$9.5 billion raised through 152 IPOs in the full year of 2018.

In Singapore, the real estate sector continues to have a strong IPO track record. Of the four trusts on SGX Mainboard, three comprised of assets from the United States in a variety of property types including hospitality, retail and offices. Prime US REIT, the largest listing in Singapore, clinched second place in the region with US$612 million raised.

Tay Hwee Ling, disruptive events assurance leader, Deloitte South-east Asia and Singapore, attributed the consistent performance of REITS to Singapore investors' preference for more stable, yield-based counters.

Thailand overtook Vietnam as the biggest market for IPOs in South-east Asia, partly due to its stable economic growth, strong currency, low interest rates and consistently strong domestic liquidity.

"The performance of Thailand's IPO market in 2019 is largely driven by home grown companies and both foreign and domestic investor liquidity is high, which continues to generate strong appeal for investors and fund managers," said Wilasinee Krishnamra, disruptive events assurance leader, Deloitte Thailand.

On the other hand, IPO amount raised in Vietnam shrank drastically from US$4,667 million in 2018 to US$171 million so far.

Deloitte observed that there was no privatisation of state-owned entities in 2019, of which there was an abundance in 2018. It is worth noting that such privatisation endeavours are subject to instructions and approvals from the state.

Political uncertainties, corporate opaqueness, and a seven per cent dip in the average post-IPO share price performance further discouraged investors from supporting Vietnamese state-owned enterprises.

Looking at 2020, Ms Tay expressed guarded optimism for the region.

"For most companies, the public equity markets will remain the natural listing destination and the performance of capital markets is vital to the health of the economy. Based on the region's growth potential, we expect the markets in South-east Asia to remain dynamic and attractive to investors," she said.

Deloitte highlighted the potential development of the Philippines and Indonesia capital markets, due to the former's proposed reduction of transaction tax and the latter's proposed reduction of corporate tax.