There have been 122 IPOs in 2024 so far on the region’s key stock exchanges, comprising Singapore, Indonesia, Thailand, Malaysia, Vietnam and the Philippines, down from a total of 163 across the whole of 2023. PHOTO: LIANHE ZAOBAO/THE STRAITS TIMES

SINGAPORE – Funds raised through initial public offerings (IPO) in Southeast Asia have fallen to a nine-year low, but the outlook for the region’s capital markets is nevertheless optimistic.

There have been 122 IPOs in 2024 so far on the region’s key stock exchanges, comprising Singapore, Indonesia, Thailand, Malaysia, Vietnam and the Philippines, down from a total of 163 for the whole of 2023.

The 2024 listings raised a total of US$3 billion (S$4.01 billion), a notable decline from the US$5.8 billion raised in 2023, according to a report by professional services firm Deloitte.

The statistics for 2024 do not include IPOs after November 15.

Deloitte Southeast Asia accounting and reporting assurance leader Tay Hwee Ling said the region’s IPO market encountered “significant regional challenges” in 2024, including currency fluctuations, regulatory differences between markets, and geopolitical tensions, all of which affected trade and investment.

“High interest rates across ASEAN economies further constrained corporate borrowing, and dampened IPO activity as companies opted to delay public listings.”

But expected rate cuts, as well as Southeast Asia’s strong consumer base, growing middle class and strategic importance in sectors like real estate, healthcare and renewable energy, will create a “more favourable” environment for more IPOs in the years ahead, noted Ms Tay.

Deloitte found that Malaysia was the strongest performer in the region in 2024, with 46 IPOs raising a total of US$1.5 billion, the highest in six years. The country accounted for almost 40 per cent of the region’s listings and more than half of the total amount raised across the six bourses.

Indonesia’s IPO market, a consistent strong performer in the past five years, recorded a significant decline, with 39 IPOs raising US$368 million so far in 2024, compared with 79 IPOs raising US$3.6 billion in 2023.

According to Deloitte, this was because smaller companies launched IPOs with more conservative fund-raising targets, given that 2024 was an election year in Indonesia, with the uncertainty exacerbated by global market headwinds.

Only four companies braved a listing in Singapore, raising approximately US$34 million.

They are cancer treatment provider Singapore Institute of Advanced Medicine Holdings, Japanese restaurant operator Food Innovators Holdings, commercial interior designer and engineer Attika Group, and karaoke operator Goodwill Entertainment.

The Singapore Exchange also hosted two secondary listings: Helens International, a Chinese bar brand with a primary listing on the Stock Exchange of Hong Kong, and PC Partner Group, a manufacturer and distributor of electronic products, also listed on the Hong Kong exchange.

The Monetary Authority of Singapore announced in August that it had formed a review group to recommend steps to strengthen the development of Singapore’s stock market. The review group has until August 2025 to suggest measures to attract primary and secondary listings to Singapore as well as improve liquidity.

Mr Darren Ng, transactions accounting support partner at Deloitte Singapore, said the review group is expected to encourage more diverse listings and improve market efficiency, reinforcing Singapore’s status as a leading financial hub.

He also pointed towards real estate investment trust (Reit) listings as a way to boost the Republic’s IPO market.

“With these favourable conditions and regulatory support, Singapore’s IPO market, particularly in the Reit sector, is set for robust growth in 2025,” he said.

Mr Ng added that Singapore companies listing in overseas markets like the US have struggled post-listing, which is why more firms are expected to explore listing on the local exchange.

“As global interest rates stabilise, investor appetite for income-generating assets like Reits is expected to strengthen… we do have some cautious optimism for the Singapore stock market in 2025,” he said. THE STRAIT TIMES/ANN