Companies in Southeast Asia raised a record $4.9 billion through the IPO route in the first six months of this year, 50 per cent more than the same period in 2019, latest equity capital markets data from Bloomberg showed.
Of the total amount, as much as $4.1 billion was raised through additional and rights offerings.
The number of IPOs in the region also hit a historic high, led by Indonesia, which saw 23 listings on the country’s stock exchange in the first half of this year.
The momentum is expected to continue with e-commerce behemoth Bukalapak, headquartered in the archipelago, set to make its debut in the bourse on August 6 that’s touted to be the country’s biggest listing in 10 years.
Bukalapak, whose shares will trade under the ticker BUKA, seeks to raise a whopping $1.5 billion through the IPO route. The e-commerce platform has already started to offer 25.7 billion shares to the public since July 27, at Rp 850 ($0.059) per share.
However, in terms of value, Thailand topped the list, making up 57 per cent – or $2.8 billion – of the amount raised in Southeast Asia, Bloomberg said. Fuelled by listings of PTT Oil & Retail Business PCL and microfinance lender Ngern Tid Lor PCL, the country witnessed significant action in the capital market this year.
The Philippines stood at the second position with companies raising $1.3 billion, followed by Indonesia’s at $503 million.
The new Southeast Asian IPOs made an average return of 59 per cent during their first month of trading. In comparison, the best performing index in Southeast Asia, Singapore’s Straits Times Index, returned 11 per cent in the first half this year.
The top three sectors that raised the most funds through IPOs are oil & gas, food and diversified financial services, primarily because of the two massive Thai IPOs and Monde Nissin Corp in the Philippines. These three companies raised about $1 billion each, Bloomberg said.
“About one-third of companies declared that they will use part of the funds raised to repay debt or loans. This is a marked increase from less than 5 per cent of companies using their proceeds for refinancing in the same period last year and 19 percent in 2019,” said Vatsan Sudersan, Bloomberg’s APAC head of global data.
With huge amounts of liquidity in the global markets and keen investor interest in Southeast Asia’s technology sector, Indonesia and Singapore are moving to boost listings and have said that they are mulling regulatory changes in a bid to attract more investments.
Indonesia’s stock exchange has said that it is weighing the option of allowing dual-class share structures, while Singapore’s exchange said it may permit special acquisition purpose company (SPAC) listings – a much faster and less expensive way to going public than a traditional IPO – on its bourse.