In terms of IPO count, Southeast Asia has consistently outperformed Hong Kong and Australia every year since 2014, signaling a very strong and active IPO market where its performance is reflective of the ASEAN-5’s high GDP growth rate (4.8%) which is higher than Hong Kong (1.4%) and Australia (2.9%).
By 2030, ASEAN is predicted to become the fourth largest market after the EU, U.S., and China.
“There is a lot of potential in the emerging markets in Southeast Asia,” says Dr. Ernest Kan, Deputy Managing Partner (Markets), Deloitte Singapore.
Listings in the top three performing industries were largely from Thailand and Vietnam with Singapore being the third contributing country.
“With an average economic growth rate of 4.8% in ASEAN, the countries that make up this dynamic region represent a thriving trade and economic hub, and the prospects will be even greater if there are to be further improvements to infrastructure and regulatory policies,” adds Dr Kan.
Singapore’s 2016 IPO proceeds largest in region
Within the region, the Singapore Exchange (SGX) had the largest share of IPO proceeds among the six Southeast Asia stock markets, as of 21 November 2016.
IPO proceeds for shares and market capitalization on SGX raised S$2.3 billion and S$4.4 billion respectively, resuming its top spot in the region in 2016, according to data from Deloitte Singapore.
Listings this year on the SGX bounced back from 2015 and contributed 16% of total IPO listings in Southeast Asia, which is equivalent to 36% of the total funds raised in the region in 2016.
The SGX also saw 16 IPO listings this year to date. This includes two company IPOs that raised S$235 million with S$1.3 billion market capitalization as well as three REITs on the SGX Mainboard with S$1.9 billion in proceeds and S$2.6 billion market capitalization at IPO.
The Catalist board backed by 11 new equity listings to date raised S$106 million funds and S$529 million in market capitalization versus 12 Catalist listings by the end of 2015 with S$237 million funds and S$1.5 billion in market capitalization.
Responding to the performance of the Singapore IPO market for 2016 after ten months, Dr Ernest Kan, Deputy Managing Partner (Markets), Deloitte Singapore, expressed optimism for Singapore’s capital markets.
“Singapore’s IPO performance has taken a better turn with a 342% increase in amount raised and 133% increase in market capitalization, representing the strongest share for IPOs in the region in 2016. The total capital raised surged in 2016 and this was boosted by three REITs listings that contributed S$1.9 billion of fresh funds.”
The top performing industries in the last three years are Consumer Business (13 deals, S$1.2 billion), Real Estate (10 deals, S$3.9 billion) and Energy & Resources (9 deals, S$754.5 million).
REITs accounted for 61% of total amount raised from all IPOs in the last three years.
“Overall, there is a strong uptrend in Singapore’s IPO market, with confidence that this performance will continue into 2017, barring unforeseen circumstances,” added Dr. Kan.
IPO valuation in Indonesia highest in the region
In Indonesia, the IPO capital market has consistently raised approximately S$1 billion every year since 2014. IPOs in Indonesia yielded the highest median price-earnings ratio of 29.5 when compared to the region. Indonesia’s IPO performance has improved an impressive 56% in terms of change in share price since IPO.
Commenting on the outlook for 2017, Ibu Rosita Sinaga, Global IFRS & Offerings Services Leader, Deloitte Indonesia, conveyed her confidence for Indonesia’s equity market.
“Despite the slowdown in 2016, we expect the IPO market to recover in 2017 through several initiatives by the Indonesia Stock Exchange and policy reforms which include raising capital market awareness via investment galleries, seminars and workshops, reducing the process time to become listed and REITs tax reduction.”