IPO market lacks "blockbusters"

While global capital markets face numerous challenges, Southeast Asia continues to perform well. However, total capital raised was recorded at its lowest level in nine years.

Challenges

According to newly released data from Deloitte, the initial public offering (IPO) market in Southeast Asia has seen 122 IPOs in the past 10 months, raising approximately $3 billion. While the number of IPOs has remained stable, the total capital raised is still at its lowest level in nine years.

According to Deloitte experts, the decline is largely due to a lack of "blockbuster" names. In 2024, only one IPO raised more than $500 million, in contrast to four IPOs in 2023.

Malaysia, Thailand, and Indonesia raised a combined total of US$2.7 billion, accounting for over 90% of the total capital raised in Southeast Asia. Malaysia led in terms of both the number of IPOs, the total IPO capital raised, and the IPO market capitalization.

Notably, the Vietnamese market has only witnessed one IPO in the past 10 months, raising approximately $37 million. That was DNSE Securities Joint Stock Company. This company developed Entrade X, a platform designed to provide a fast trading experience with a simplified interface for securities trading.

This is also Vietnam's first IPO in the fintech sector and is approximately five times larger than the average value of IPOs from 2021 to 2023.

Ms. Tay Hwee Ling, Head of IPO Services for Southeast Asia at Deloitte, stated that in 2024, the Southeast Asian IPO market faced significant challenges. These included monetary policy fluctuations, regulatory differences between markets, and geopolitical tensions, impacting trade and investment. In particular, high interest rates in many countries continued to restrict corporate borrowing, dampening IPO activity as companies decided to postpone their public listings.

Expectations for industry dominance

Looking ahead to the region's IPO market, Deloitte analysts expect that anticipated interest rate cuts coupled with reduced inflation could create a more favorable environment for IPOs in the coming years. Southeast Asia's strong consumer base, growing middle class, and strategic importance in sectors such as real estate, healthcare, and renewable energy remain attractive to investors.

"As foreign direct investment continues to pour into the region, 2025 is predicted to be the year of new IPO activity across Southeast Asia," said Tay Hwee Ling.

As foreign direct investment continues to pour into the region, 2025 is predicted to be a year of new IPO activity across Southeast Asia.

The basis for Deloitte's leadership's assessment may stem from the number and value of IPOs in the region during the first 10 months of this year. Accordingly, the consumer goods and energy/resource industries are the two dominant sectors in Southeast Asia, accounting for 52% of all IPOs and 64% of the total IPO capital raised.

It can be said that the consumer sector in Southeast Asia is undergoing significant transformation due to changes in consumer behavior, leading to increasing competition among local, regional, and global companies.

This shift is driven by the region's growing GDP, leading to an expanding and affluent middle class with greater spending power. As incomes rise, consumers are better positioned to make more informed choices, gravitating towards premium products and seeking novel experiences.

Meanwhile, the energy and resources sector, particularly renewable energy, continues to be a focal point for Southeast Asia, as the region grapples with the challenges of ensuring energy security, equity, and environmental sustainability.

According to Mr. Bui Van Trinh, Deputy General Director of Deloitte Vietnam, the Vietnamese stock market is showing signs of recovery, supported by favorable macroeconomic conditions and a low interest rate environment. In addition, the government has issued new regulations aimed at improving the stock market's rating to bolster investor confidence in 2025.

Meanwhile, according to Ms. Tay Hwee Ling, companies wishing to list overseas should consider markets that represent the core growth segment of their business. These are also markets where investors can better understand and evaluate their business model, and where many comparable companies are listed.

In particular, a market with many high-quality options will somewhat limit the flow of money into less well-known businesses. This requires companies conducting IPOs to have a comprehensive strategy to differentiate themselves and attract large investors.

Source: https://baodautu.vn/thi-truong-ipo-vang-bong-bom-tan-d230996.html