Singapore and Malaysia revitalise Southeast Asia's IPO market in 2017 with blockbuster listings
- Highest funds raised in four years at S$10.4 billion across Southeast Asia
- Singapore maintains top spot on Southeast Asia leaderboard with largest funds raised
- Two major listings offered a shot in the arm for Malaysia’s IPO market
SINGAPORE, 23 November 2017 — Capital markets across Southeast Asia produced record-high capital raising activity in 10.5 months of 2017. 144 initial public offerings (IPOs) hit S$10.4 billion in total funds raised with a market capitalisation of S$33.9 billion according to data from Deloitte Singapore – the highest since 2014, reflecting positive listing decisions and investor confidence in Southeast Asian exchanges.
The growth led by seven blockbuster listings includes two deals each in Malaysia and Singapore and three deals in Thailand. Mainboard-listed NetLink NBN Trust took the top spot in Southeast Asia with S$2.45 billion raised, creating the largest IPO in Singapore since 2011. Malaysia’s Lotte Chemical Titan Holding Berhad raised the second highest amount at S$1.2 billion, boosting Bursa Malaysia’s profile, despite a decline in number of new IPOs. Meanwhile, Indonesia and Thailand have consistently raised S$1 billion and S$2 billion respectively in the past four years.
Jumbo listings in Southeast Asia’s IPO market contributed to the outstanding performance in terms of total IPO funds raised and the total number of new listings. Noting the strong GDP growth in each of the Southeast Asian economies, Dr Ernest Kan, Global IFRS & Offerings Services Leader, Deloitte Southeast Asia expects to see this trend continuing into the next year with the liberalisation of China’s foreign investment policy and the steady rise of REITs and Business Trusts in each of the Southeast Asian markets which generally are of mega size market capitalisations.
The Singapore Exchange (SGX) saw 15 deals this year as at 15 November 2017 and the total amount of funds raised at S$3.7 billion has surpassed the last three years to be the highest in four years. This includes two company IPOs and three trusts on SGX Mainboard with S$248 million and S$3.2 billion funds raised respectively, and S$1.1 billion and S$4.3 billion market capitalisation at IPO. On the Catalist board, there were 10 deals that raised S$202 million with a market capitalisation of S$1.1 billion.
Responding to the performance of the Singapore IPO market for 2017 after 10.5 months, Ms Tay Hwee Ling, Global IFRS & Offerings Services Leader, Deloitte Singapore, pointed out that Singapore already sees 15 deals as compared to 16 deals last year while the amount raised this year increased 61.8% and IPO market capitalisation increased by 49.1%. Post 15 November 2017, the market saw one additional listing and three registrations/lodgements, which includes Cromwell European Real Estate Investment Trust that has an anticipated market capitalisation of S$1.4 billion. Deloitte expects Singapore’s IPO market to close the year with more than 20 IPOs.
“Liquidity in Singapore’s equity market remains high as there were more IPOs with public offer tranche in the last 10.5 months. Of the 15 IPOs to date, there were ten public subscriptions and all were oversubscribed at a median of 32 times and an average of 103 times,” said Ms Tay.
In Malaysia, the IPO capital market raised a total of S$2.4 billion as at 15 November 2017, far exceeding 2016’s funds raised of S$377 million. Despite the lower number of IPO listings in recent years, Mr Gary Huang, Global IFRS & Offerings Services Leader, Deloitte Malaysia, expects this to improve. The demerger of Sime Darby Group will add two more listings for the year and initiatives by Bursa Malaysia to introduce the LEAP market (Leading Entrepreneur Accelerator Platform) for SMEs are expected to increase the number of IPOs.
“We have a huge SME market and many of these companies have desire to list but may not be qualified or are not ready. While the LEAP Market are for sophisticated investors, it aims to provide a platform for SME companies to list as a PLC and acts as a feeder to Bursa’s Main and ACE Market. The LEAP Market was introduced in June this year and we expect more SMEs to list in 2018 in addition the two we have today. With time, this will lead to an increase in the number of PLCs on Bursa’s Main and ACE Market” said Mr Huang.
Looking into 2018, Dr Kan expressed optimism for Southeast Asia’s capital markets. “Against a healthy global backdrop and resilient domestic demand that supports growth with Southeast Asia’s GDP forecasted at 5.1% — way exceeding the Global GDP forecasted at 2.7%, we can expect the markets to remain dynamic and attractive to investors,” said Dr Kan.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about to learn more about our global network of member firms.
Deloitte provides audit, consulting, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500® companies through a globally connected network of member firms in more than 150 countries and territories, bringing world-class capabilities, insights and high-quality service to address clients’ most complex business challenges. To learn more about how Deloitte’s approximately 245,000 professionals make an impact that matters, please connect with us on Facebook, LinkedIn or Twitter.
About Deloitte Southeast Asia
Deloitte Southeast Asia Ltd—a member firm of Deloitte Touche Tohmatsu Limited comprising Deloitte practices operating in Brunei, Cambodia, Guam, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam—was established to deliver measurable value to the particular demands of increasingly intraregional and fast-growing companies and enterprises.
Composed of 320 partners and more than 7,700 professionals in 25 office locations, the subsidiaries and affiliates of Deloitte Southeast Asia Ltd., combine their technical expertise and deep industry knowledge to deliver consistent, high-quality services to companies in the region.
All services are provided through the individual country practices, their subsidiaries and affiliates, which are separate and independent legal entities.