IPO: Steady listings In SEA But Funds Halved In 2022

Compared to 2021, Southeast Asia in 2022 sees a 52% fall in IPO funds raised, even though IPO count and IPO market capitalisation are expected to hold steady while Thailand and Indonesia are top of the table for listings in Southeast Asia for 2022

IPO: Steady listings In SEA But Funds Halved In 2022
Southeast Asia IPO markets are peppered with smaller-sized listings this year - Pix Wikipedia

Compared to 2021, Southeast Asia in 2022 sees a 52% fall in IPO funds raised, even though IPO count and IPO market capitalisation are expected to hold steady.
Thailand and Indonesia are top of the table in Southeast Asia for 2022; each raised above US$2 billion, collectively accounting for 76% of total funds raised across Southeast Asia.

Southeast Asia IPO markets are peppered with smaller-sized listings this year, bolstered by two blockbuster listings each having raised US$1 billion and above - PT GoTo Gojek Tokopedia Tbk and Thai Life Insurance Public Company Limited.
REITs, the traditional stronghold in Southeast Asia saw only four listings in 2022 - a stark contrast from ten in 2021, that accounted for 23% of all funds raised across all SEA exchanges last year.

KUALA LUMPUR, 15 November 2022 — With momentum slowing down from 2021, initial public offering (IPO) funds raised were subdued across the capital markets in Southeast Asia for the first 10.5 months of this year, even though the IPO count and IPO market capitalisation are expected to hold steady from the previous year.

Data by Deloitte as at 11 November 2022 showed that companies in Southeast Asia raised US$6.3 billion from 136 IPOs to-date this year, [52%] down from a record US$13.3 billion from 152 IPOs in the full year of 2021.

This indicates a higher number of small listings this year, mostly from smaller companies that needed the platform to raise funds in today's challenging market environment.

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With only two blockbuster IPOs this year - PT GoTo Gojek Tokopedia Tbk and Thai Life Insurance - this could mean that the bigger companies are holding out and postponing their listing in anticipation of better market conditions.​

The COVID-19 pandemic spurred a flood of new retail investors into the stock market and consequentially there was a boom in the IPO market globally in 2021, with US and UK witnessing a record amount of IPO funds raised. Southeast Asia capital markets too enjoyed a successful year in 2021.

This momentum slowed down this year, albeit with Southeast Asia weathering the crash slightly better with a 52% drop, compared to the 95% and 91% decrease in IPO proceeds in US and UK respectively.

The Malaysian IPO market has emerged from the pandemic with a 102% increase in the proceeds raised at US$681 million.​This surge has been driven by investors' demand for good fundamental companies. In particular, the number of ACE listings doubled from 11 in 2021 to 22 in 2022, which is impressive given the economic climate.

The interest rate hike would potentially encourage more companies with good business fundamentals to seek listing as they can leverage on the equity market for a diversified and cheaper funding base.

"Notwithstanding the impact of the elections on the IPO market, there remains a steady pipeline of companies looking to tap the capital markets.  

"The strong performance in 2022, against a backdrop of global inflation, rising interest rates and the threat of a recession, is proof of the resilience of the Malaysian capital market," says  Wong Kar Choon, Disruptive Events Advisory Leader, Deloitte Malaysia.