Despite a global downturn in the IPO market during the first half of 2023, Southeast Asia’s initial public offering (IPO) scene is demonstrating resilience and attracting significant investor attention, according to a recent report by Deloitte.
During the last six months, Southeast Asia witnessed an impressive 16% increase in the number of IPOs, with 85 companies going public and raising a total of $3.3 billion in proceeds. Comparatively, the same period in the previous year saw 73 IPOs raising $3.1 billion, indicating a positive growth trend in the region.
The Deloitte report attributes Southeast Asia’s robust IPO market to various factors. The reopening of the region’s economies, the revival of the tourism industry, and the surge in domestic demand have all contributed to the positive economic outlook, making the region a preferred investment destination for both domestic and foreign investors.
Among the notable IPOs, Indonesia emerged as a rising star, securing 70% of the total IPO proceeds in Southeast Asia for the first half of 2023. The country’s impressive performance was bolstered by three significant listings: PT Trimegah Bangun Persada Tbk, a nickel company; PT Merdeka Battery Materials Tbk, a minerals and EV battery materials firm; and PT Pertamina Geothermal Energy Tbk, a geothermal power plant operator.
Indonesia’s President Joko Widodo has actively pursued measures to position the nation as a global hub for electric vehicle supply chains. Collaborative agreements with Australia, particularly in the production of essential EV minerals like lithium and nickel, have further fueled investor interest in the country. Deloitte notes that Indonesia’s vast nickel reserves and the successful IPO of Harita Nickel (PT Trimegah Bangun Persada Tbk) exemplify the strong appeal to both local and international investors.
Deloitte forecasts that Indonesia is on track for its most successful IPO year, with 44 listings expected in the first half of 2023 alone. Thailand and Malaysia follow suit, with 18 and 16 listings, respectively, during the same period.
Deloitte emphasizes that the pro-growth policies, stable macroeconomics, and favorable demographics of Southeast Asian countries, combined with the growing influence of tech-enabled entrepreneurs and strong trade ties with China, present a plethora of exciting investment opportunities in the region’s capital markets.
However, Deloitte maintains a cautious stance regarding the region’s prospects for the second half of the year. Economic uncertainties, including potential interest rate hikes, challenges in the banking sector, and inflation concerns, continue to pose risks to the region’s recovery. The International Monetary Fund also projects a slight slowdown in Southeast Asia’s growth, estimating a decline from 5.7% in 2022 to 4.6% in 2023, attributing this to moderating domestic demand in Malaysia and Thailand, easing commodity prices in Indonesia and Malaysia, and weaker external demand from the United States and Europe.