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.

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