Robust IPO activity in South-east Asia boosted by Thailand, Philippines, Indonesia: Deloitte

CAPITAL markets in South-east Asia have recorded robust activity in initial public offerings (IPOs) for the first 10.5 months in 2021, with Thailand, the Philippines and Indonesia contributing to 95 per cent of funds raised.

From Jan 1 to Nov 15, 2021, companies in the region raised a record US$9.8 billion from 121 IPOs, compared to the US$7 billion raised from 114 IPOs in the whole of 2020, Deloitte said on Thursday (Nov 25), in its roundup of the 2021 IPO market for South-east Asia.

Thailand raised US$4.2 billion in IPO proceeds, the highest amount in the region for the third consecutive year, and represented 43 per cent of total funds raised in the 10.5-month period. The Stock Exchange of Thailand's (SET) biggest listing was from PTT Oil and Retail Business, with US$1.8 billion raised.

Deloitte Thailand's disruptive events advisory leader Wilasinee Krishnamra said the diverse IPOs in 2021 on the SET - which included oil groups, telecommunications, retailers and finance companies - had appealed to a wide range of investors.

"We expect at least 10 more IPOs in Thailand to top off an already stellar year," she said, noting that the SET may see more digital and tech listings based on the performance of newly listed tech companies on the Market for Alternative Investment.

The Philippines also raised more funds in 2021 than in the last 4 years combined, with 4 mega real estate investment trust (Reit) listings that raised a total of US$1.8 billion and its largest-ever listing by Monde Nissin Corporation, which raised US$1 billion.

As for Indonesia, it raised US$2.3 billion in the first 10.5 months of 2021, from US$377 million in 2020. This was the first time it surpassed the US$2 billion mark, boosted by the second largest IPO in South-east Asia by tech company Bukalapak, which raised US$1.5 billion.

Deloitte Indonesia's disruptive events advisory leader Imelda Orbito said: "This is just the cusp of a new era of listings."

She expects IPO activity will be boosted by the Indonesia government's privatisation plan to list 14 state-owned companies, and the emerging tech scene in the region.

Meanwhile, the number of IPOs in Malaysia have returned to pre-pandemic levels, driven by cornerstone investors and an abundance of uninvested capital, as well as growing interest from technology-based startups and companies looking to increase their presence and capacity to tap the capital markets.

As for Singapore, while the Republic saw scarce IPOs in the 10.5 months - a US$233 million IPO on the mainboard and 4 Catalist board listings that raised a total of US$37 million, Deloitte expects the remaining 1.5 months of 2021 to be the "highlight", driven by the listings of Daiwa House Logistics Trust and Digital Core Reit.

In fact, Reits were the "stronghold" in South-east Asia, with the listing of 7 Reits in the region accounting for 21 per cent of total funds raised in 2021.

Additionally, a new framework for Special Purpose Acquisition Companies (SPACs) should also help Singapore's capital market bounce back from this dry IPO spell to outperform last year.

Tay Hwee Ling, disruptive events advisory leader of Deloitte South-east Asia and Singapore, expects there is still a supply of listings to the end of the year and looks forward to South-east Asia crossing the US$10 billion mark.

She said IPOs are likely supported by abundant liquidity, a buzz around SPACs and the potential of new economy companies in the region.

"I am bullish about what the region's capital markets can achieve in 2022 with the diverse sources of investment capital and growing interest by sovereign wealth funds in Asian businesses," Tay added.

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