Initial public offering (IPO) activity across South-east Asia has remained resilient this year despite economic headwinds and tensions around the United-States-China trade war and Brexit.
There have been 138 IPOs so far raising a total of US$6.79 billion (S$9.28 billion), with Thailand accounting for 39 per cent and Singapore 33 per cent. This compares with 152 IPOs last year which raised US$9.5 billion, accounting firm Deloitte said yesterday.
The Stock Exchange of Thailand raised US$2.63 billion in IPO proceeds as at Nov 15, making it the biggest listing market in South-east Asia. This was due to the debut of Asset World Corp Public Company, which topped the region with US$1.38 billion in funds raised. It also marks the third consecutive year that Thailand has raised more than US$2 billion from IPOs.
"This year has been more challenging with the US-China trade war, Brexit and uncertain economic outlooks for various countries. But, excluding Vietnam, the South-east Asian IPO market has been doing quite well despite the challenges," said Ms Tay Hwee Ling of Deloitte South-east Asia and Singapore.
Several IPOs earmarked for the Singapore Exchange (SGX) were deferred owing to economic uncertainty, yet there was a fourfold increase in funds raised to US$2.26 billion as at Nov 15, from US$551 million raised last year. There have been 11 IPOs so far this year, compared with 15 last year.
The real estate sector continues to have a strong IPO track record here. Of the four trusts on the SGX mainboard, three comprised assets from the US in a variety of property types, including hospitality, retail and offices. Prime US Reit, the largest listing in Singapore, took second place in the region with US$612 million raised. Ms Tay attributed the consistent performance of Reits to Singapore investors' preference for more stable, yield-based counters.
The range of capital-raising options has increased significantly, but the SGX still has the most Reits listed (excluding Japan) owing to tax transparency, a progressive regulatory framework and strong secondary fund-raising activity. "The Singapore market is attracting more foreign issuers to list because of its stable political environment... But a key challenge is how to innovate and stay relevant despite the challenges," she said.
The rise of private exchanges and the growth of private equity investors, which can allow for faster and greater access to funds with fewer costs, as well as the option of an overseas listing, has changed fund-raising here. Stock exchanges will need to adapt to this changing landscape to attract issuers, said Deloitte.
Ms Tay noted: "For Singapore, we are expecting a strong pipeline of listings from the Reits and service-based companies next year.
"While there is no lack of liquidity in Singapore's capital market, as evident from the strong secondary fund-raising market of $5.8 billion and the sizeable funds raised of $3.1 billion from IPOs this year, we foresee that companies will be more discerning in weighing the pros and cons of an IPO vis-a-vis a private capital raising option."