Led by Indonesia, SE Asia's public markets defy global IPO slump

Led by Indonesia, SE Asia's public markets defy global IPO slump

Joshua Mayo / Unsplash.com

Though startup fundraising from PE and VC investors has slowed to a trickle in Southeast Asia, capital raising through initial public offerings (IPOs) has been remarkably stable and resilient in the region, according to DealStreetAsia DATA VANTAGE‘s latest report SE Asia’s Public Markets: Resilience in Uncertain Times.

Led by Indonesia, which is witnessing a ‘green IPO’ boom as clean energy companies and those in the EV space go public, Southeast Asian bourses have defied the global slump in public market fundraising.

The region, on the whole, saw a steady stream of 160 IPOs throughout 2023, up from 150 and 135 in 2022 and 2021, respectively. However, in line with global trends, funds raised from the initial share sales fell 19.8% year-on-year (YoY) to $5.8 billion in 2023.

For comparison, global IPO volume was down 5% in 2023 to 1,341, while funds raised from these IPOs fell 32% YoY to $126 billion. According to EY data, in the first half (H1) of 2024, there were 551 IPOs across global exchanges, down 12% YoY. IPO proceeds in H1 2024 were down 16% to $52.2 billion.

In 2023, the Indonesia Stock Exchange (IDX) alone hosted 80 IPOs, surpassing regional powerhouse Hong Kong, where only 73 companies listed their shares. Indonesia continues to be the most active IPO market in Southeast Asia in 2024 as 20 companies were listed between Jan 1 and May 7, 2024, raising 2.6 trillion rupiah ($160 million).

In the biggest IPO in Southeast Asia last year, Jakarta-based copper miner Amman Mineral Internasional raised 10.73 trillion rupiah (around $715.8 million). The company’s shares have soared around 6.5x on IDX from 1,745 rupiah apiece on their listing day (July 7, 2023), to 11,475 rupiah apiece on July 2, 2024, thanks to rising copper demand due to the metal’s importance in the global transition to renewable energy.

The top six IPOs in Southeast Asia in 2023 were all hosted on IDX.

Meanwhile, 2024 has witnessed a slow start to the IPO market in Indonesia due to a slow first quarter on account of Ramadan and Lebaran. Global uncertainties also hurt markets. Yet, there were 20 IPOs up to May 7, 2024, which were from a wide range of sectors.

“The market weakness in H1 2024 seems more to do with global capital flows than the state of the Indonesian economy. This situation is unlikely to persist for long as flows will likely reverse at some point, given attractive valuations and Indonesia’s strategic importance in the EV value chain,” the report stated.

Meanwhile, there is widespread optimism that the US Fed will cut interest rates this year, which should lead to a revival in IPO sentiment.

For instance, in Thailand, 2024 looks set to see a rebound in IPOs with a new government in place and a strong pipeline of offerings both on the Stock Exchange of Thailand (SET) and the smaller Mai Board (Market for Alternative Investments).


Unlock the SE Asia’s Public Markets: Resilience in Uncertain Times report for only $299 or upgrade to a Premium Plus subscription for greater savings and enjoy full access to up to 36 research reports a year, all for just $1200 ($100/month).


End of the road for SPACs

One notable public market trend has been the boom and bust of SPACs, or blank cheque companies.

While SGX-listed SPAC Vertex Technology Acquisition Corp merged with live-streaming platform 17Live Inc last year, the other two blank cheque companies on the bourse—Novotellus Alpha Acquisition and Pegasus Asia—have both announced that they will not be concluding any acquisitions. This pours cold water on SPACs in general.

This is similar to the fall in popularity of SPACs in the US. In Hong Kong, too, only five SPACs were listed—the last in December 2022—since the introduction of the scheme.

The day of the SPAC may have already passed as it was a late-stage fundraising option. SPACs attracted a good deal of scepticism from institutional investors given that the companies involved in mergers are often loss-making or even in some cases without revenues,” according to the report.

Edited by: Pramod Mathew

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