Southeast Asia bourses stay resilient against economic headwinds in 2019 with healthy levels of IPO activity

Event Calendar Press Releases Monday December 2, 2019 17:59
Bangkok--2 Dec--Deloitte Thailand
  • Southeast Asia bourses raised US$6.8 billion in 2019 with 138 IPOs
  • Thailand emerges top performer in Southeast Asia with largest funds raised in 2019, accounting for 39%
  • REITs listings continue to out-perform in Singapore's capital market in 2019, in spite of changing landscape of fund raising options for issuers

Capital markets across Southeast Asia remained buoyant in 2019 despite on-going global geopolitical tensions, US-China trade conflict and potential outcomes of Brexit. According to data from Deloitte Singapore, capital raising activity in 10.5 months of 2019 produced 138 initial public offerings (IPOs), generating US$6.8 billion in total funds raised. The IPO momentum was largely driven by Thailand and Singapore, which respectively accounted for 39% and 33% of total funds raised. This compares to 152 IPOs for the full year 2018, which raised US$9.5 billion.

Thailand's Asset World Corp Public Company Limited took top spot on the Southeast Asia leaderboard with the largest listing of US$1.38 billion funds raised. Prime US REIT was the largest listing in Singapore, ranking second in Southeast Asia with US$612 million raised.

This year, Thailand overtook Vietnam as the biggest market for IPOs in Southeast Asia. A stable economic growth, strong currency, low interest rates and consistently strong domestic liquidity have allowed the Stock Exchange of Thailand to net US$2.63 billion in IPO proceeds as of 15 November 2019. This marks the third consecutive year that Thailand has raised more than US$2 billion from IPO listings.

"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. We are seeing a strong deal pipeline for Thailand and we expect capital market activity to continue to increase the total market capitalisation of the Stock Exchange of Thailand," said Ms Wilasinee KRISHNAMRA, Disruptive Events Assurance Leader, Deloitte Thailand.

Singapore's IPO market saw a four-time increase in funds raised this year. As at 15 November 2019, the Singapore Exchange (SGX) raised a total of US$2.26 billion in IPO proceeds from 11 IPO deals as compared to US$551 million funds raised from 2018's 15 IPO deals. This includes four trusts IPOs on SGX Mainboard with US$2.22 billion funds raised and seven deals on the Catalist board that raised US$43 million.

The real estate sector continues to have a strong IPO track record on the Singapore bourse. Of the four trusts, three comprised of assets from the United States in a variety of property types including hospitality, retail and offices. Although the range of capital raising options has increased significantly in recent years, SGX still has the most REITs listed (excluding Japan), according to data as of 15 November 2019, and continues to have a strong diversified portfolio of mixed assets. This is largely due to tax transparency, the regulators' progressive framework and strong secondary fundraising activity.

The rise of private exchanges and the growth of private equity investors – where from the issuers' perspective, may allow for faster and greater access to funds with less costs - as well as the option of an overseas listing, has changed the landscape of fund raising in Singapore as mid-market enterprises look beyond a Catalist listing. Stock exchanges will need to adapt to this changing landscape and stay relevant, to continue to innovate to attract issuers.

Commenting on the outlook for 2020, Ms TAY Hwee Ling, Disruptive Events Assurance Leader, Deloitte Southeast Asia and Singapore, voiced 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 Southeast Asia to remain dynamic and attractive to investors."

"For Singapore, we are expecting a strong pipeline of listings from the REITs and service-based companies in 2020. While there is no lack of liquidity in Singapore's capital market, as evident from the strong secondary fundraising market of S$5.8 billion (US$4.25 billion) and the sizeable funds raised of S$3.1 billion (US$2.26 billion) from IPOs in 2019, we foresee that companies will be more discerning in weighing the pros and cons of an IPO vis-à-vis a private capital raising option," added Ms Tay.

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