Malaysia’s IPO Market Report Card

Southeast Asia Mid-Year IPO Snapshot

Deloitte’s newly published Southeast Asia (SEA) Mid-Year IPO report featured the Top 10 Listings in SEA in 2023 H1 and reflected a positive regional IPO outlook. The first half of 2023 opened with a strong capital and IPO market in Southeast Asia, maintaining competitive capital market pricing despite a long list of threats and impending predicted sharp slowdowns to the worldwide economy.

2023 H1 Regional Performance

• The Southeast Asia IPO capital market achieved 85 IPOs in 2023 H1, with US$3.3 billion in IPO proceeds raised and an IPO market capitalisation of US$20.1 billion as compared to 2022 H1 with 73 IPOs, US$3.1 billion in IPO proceeds and IPO market capitalisation of US$35.4 billion
• As compared to 2022 H1, 2023 H1 saw a 16% increase in the new number of new IPOs and 5% increase in IPO amounts raised

What’s happening in the region?

Continuing from the year before, Indonesia is impressively leading with their IPO market having the best results to date, raising approximately USD2.3 billion from a total of 44 IPOs. This is followed by Thailand at USD528 million, Malaysia at USD363 million, Philippines at USD66 million, and Singapore at USD33 million.

Being Southeast Asia’s largest economy and a nation with one of the world’s largest populations, Indonesia continues to see massive and increasingly profitable IPOs. Notably, the largest IPO in the entire SEA region hails from Indonesia’s energy and resource industry – PT Trimegah Bangun Persada Tbk, having raised USD683 million and a market capitalisation of USD5,390 million.

Malaysia’s 2023 H1 Performance

Closer to home, the Bursa Exchange is going against all the odds and standing strong with 16 listings raising approximately RM1.6 billion with a market capitalisation of RM9.4 billion. The listings of Radium Development Berhad and Cape EMS Berhad ultimately placed in the top 10 listings in Southeast Asia, with a combined total of RM667.73 million raised in proceeds. In comparison to the first half of 2022, Bursa had around 16 listings which raised approximately RM2.1 billion, mostly due to the listing of a strong heavyweight, Farm Fresh Berhad.

All these data points have shown continued confidence in Malaysia’s capital market, with a proven track record of business. Most of the 16 IPOs have had high oversubscription rates due to the support from institutions and retail investors.

The recent announcement by the Prime Minister on capital market competitiveness have provided substantial positive messages for stakeholders in the capital market, which includes the reduction of stamp duty rates for the trading of listed shares in Bursa and a relook at policies to attract and widen the pool of investors.

Outlook for Malaysia and Southeast Asia

With the introduction of the Madani Economy Framework, the next 10 years will aim to rebuild the nation based on the values of sustainability, care and compassion, respect, innovation, prosperity, and trust. This framework will focus on Malaysia being a leading Asian economy while elevating Malaysians’ quality of life. While there may be negative sentiments in the market and a possibility of companies pulling their brakes in such times, the IPOs in Southeast Asia, including Malaysia, have shown that the right companies can continue to raise funds and attract investors. Good technology-enabled companies will continue to get the funds they need for expansion, either through an IPO or via Private Equity funding.

Southeast Asia’s positive growth outlook is making the region an investor favourite. There continues to be an influx of foreign direct investment due to the region reopening its doors, restoration of the tourism industry, and a booming domestic demand. Together, these factors have contributed to the positive economic growth in the region despite the global economic uncertainties.

Wong Kar Choon is the Disruptive Events Advisory Leader of Deloitte Malaysia. The above views are his own.