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Retailers help heat up IPO activity in South-east Asia

Hong Kong

RETAIL has been one of the hottest sectors among recent South-east Asian initial public offerings, as investors look to cash in on consumers' increasing spending power in the region.

"The domestic consumption growth story in South-east Asia remains an attractive thematic for equity investors," said Ho Cheun Hon, head of South-east Asia equity capital markets at Credit Suisse.

Home supplies retailer AllHome Corp raised US$248 million in an IPO last week, just the third new listing in the Philippines this year. Home improvement company Dohome PCL raised US$113.3 million in a Thai IPO in July.

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Central Group, one of Thailand's biggest conglomerates, is planning an IPO of its retail arm in the first quarter of next year that could raise as much as US$2 billion, people familiar with the matter previously told Bloomberg. That would make it the second-largest offering on record in Thailand, after BTS Rail Mass Transit Growth Infrastructure Fund's US$2.1 billion listing in 2013.

Among other pending deals, Malaysia's Mr DIY, the nation's biggest home improvement retailer, is looking to raise about US$500 million in an IPO, Bloomberg News reported in January.

The owner of Tealive bubble tea brand in the country is seeking a US$72 million IPO in 2020, people familiar with the matter said in May.

The prevalence of home improvement-related retailers reflects the relative appeal of speciality store operators, according to Mr Ho.

"Specialised retail is typically considered more attractive than general retail as it's less susceptible to e-commerce disruption," he said. BLOOMBERG