ASEAN IPO market should rebound in 2025: Deloitte report

 

The Southeast Asian initial public offering (IPO) market is poised for a rebound in 2025, despite a tepid performance in 2024, according to a recent Deloitte report analysing regional capital markets that was released on Tuesday.

 

The region witnessed 122 IPOs raising approximately US$3.0 billion in the first 10.5 months of 2024, marking the lowest capital raise in nine years. This represents a significant decline from 2023's US$5.8 billion raised across 163 IPOs.

 

 

Thailand's IPO landscape

Thailand recorded 29 listings in 2024, raising US$756 million, representing 26% of the region’s total IPO funds.

 

Wilasinee Krishnamra from Deloitte Thailand noted that Thailand’s stock market this year reflects a blend of economic recovery and moderate growth.

 

“Companies are showing resilience by adopting Generative AI and robotics, while regulators have introduced initiatives to boost market transparency and support new businesses, stimulating fundraising activities,” she said.

 

Deloitte’s outlook for Thailand's IPO market is cautiously optimistic, anticipating a gradual recovery following last year’s slowdown. Increased listings are expected as the government rolls out supportive measures and regulatory reforms to bolster investor confidence. Key opportunities include the approval of more investment certificates for foreign investors and a revitalised market driven by tourism and improving economic conditions.

 

However, challenges remain, including political uncertainties and stricter compliance regulations that may discourage smaller companies from entering the market.
 

 

 

Additionally, the current emphasis on enhancing quality and governance standards could lead to a backlog for prospective listings. Despite these hurdles, positive signs for growth persist, and companies must effectively navigate these challenges to seize potential opportunities.

 

Regional market overview

The Consumer and Energy & Resources industries dominated the Southeast Asian IPO market, accounting for 52% of total IPOs and 64% of funds raised. Malaysia emerged as a standout performer, with 46 listings raising US$1.5 billion, the highest in six years.

 

Hwee Ling Tay from Deloitte Southeast Asia predicted a more favourable environment in 2025, citing expected interest rate cuts and easing inflation. She emphasised the region’s strong consumer base and strategic importance in sectors like real estate, healthcare and renewable energy.

 

Wong Kar Choon from Deloitte Malaysia praised the country’s robust market performance.

 

“Malaysia’s IPO market has thrived, supported by positive economic indicators and political stability, with oversubscription rates exceeding 200 times. As Malaysia enters a more stable growth phase, Bursa Malaysia has significant potential to become an attractive listing destination for regional companies," he said.

 

Meanwhile, Jasmin Maranan from Deloitte Indonesia shared insights on market dynamics.

 

“As the local market looks for clarity on fiscal and monetary policies from the new administration, the economic outlook remains positive, driven by government-led infrastructure and digital transformation initiatives, a large consumer base, and abundant natural resources," she noted.

 

 

 

Van Trinh Bui from Deloitte Vietnam pointed to the country's emerging potential.

 

“Vietnam's stock market is showing recovery signs in 2024, bolstered by favourable macroeconomic conditions and a low-interest rate environment. The government has introduced new regulations to enhance stock market ratings and boost investor confidence heading into 2025," he stated.

 

In Singapore, Darren Ng from Deloitte highlighted a renewed focus on REITs as a strategic approach.

 

“With global interest rates stabilising, investor appetite for income-generating assets is expected to grow. Singapore continues to be a preferred listing destination for REITs in Asia, attracting both local and international issuers,” he explained.

 

 

Outlook for 2025

Despite the challenges of 2024, experts remain optimistic about the future of Southeast Asia's IPO market. Factors such as potential interest rate cuts, easing inflation, and the region’s strong economic fundamentals are expected to drive a resurgence in IPO activity in 2025.

 

Deloitte Southeast Asia’s Accounting & Reporting Assurance leader, Tay Hwee Ling, commented on the factors influencing the 2024 IPO market, including currency fluctuations, regulatory differences, geopolitical tensions, and high interest rates. She emphasised the importance of selecting appropriate listing markets for companies, considering such factors as investor understanding and sector-specific expertise.

 

As Southeast Asia continues to evolve, its IPO market is poised to play a crucial role in driving economic growth and innovation. With supportive regulatory frameworks and a growing investor base, the region is well-positioned to capitalise on future opportunities.