Southeast Asian initial public offering (IPO) market remains tepid in 2024, but momentum builds towards a 2025 rebound, Deloitte said in a statement on Tuesday.

The firm said in a statement that For the first 10.5 months of 2024, the IPO capital markets in Southeast Asia saw a count of 122 IPOs, raising approximately $3.0 billion.

While the number of IPOs remains healthy, the total capital raised has been the lowest in nine years, with a decline from the $5.8 billion raised across 163 IPOs in 2023.

The region also saw a decline in IPO activity compared to the previous year, largely due to a lack of blockbuster listings.

In 2024, only one IPO raised over $500 million, in contrast to four such listings in 2023.

Despite global economic uncertainty accentuated by significant political shifts, which has created challenges for capital markets worldwide, Malaysia has stood out as a bright spot in Southeast Asia.

It leads the region in all three key metrics: number of IPOs, total amount IPO funds raised, and IPO market capitalization.

Overall, Malaysia, Thailand and Indonesia collectively raised approximately $2.7 billion, accounting for more than 90% of the total funds raised across Southeast Asia.

In terms of industries, consumer and energy and resources are the top two dominating the region, accounting for 52 percent of the total number of IPOs and 64 percent of the total IPO funds raised.

The consumer industry in Southeast Asia is undergoing significant transformation due to a shift in consumer behavior, which has led to heightened competition across local, regional, and global players.

This change is driven by the region’s growing gross domestic product (GDP), which has led to an expanding and increasingly affluent middle-class with greater spending power.

As income levels rise, these consumers are in a better position to make more discerning choices, opt for premium products, and seek novel experiences.

The energy and resources industry, specifically the renewable energy sector, continues to be a focal point for Southeast Asia as the region grapples with the trilemma of ensuring energy security, equity, and environmental sustainability as it transitions towards more sustainable resources while balancing the need to meet rising energy demands.

“Southeast Asia’s IPO market encountered significant regional challenges in 2024, including currency fluctuations, regulatory differences across markets, and geopolitical tensions, which affected trade and investment,” said Tay Hwee Ling, Accounting and Reporting Assurance Leader, Deloitte Southeast Asia.

According to her, high interest rates across ASEAN economies further constrained corporate borrowing, dampening IPO activity as companies opted to delay public listings.

Additionally, she noted market volatility among major trade partners impacted investor confidence, while varied regulatory requirements across Southeast Asian countries created complexities for companies seeking cross-border listings.

“Companies seeking to list overseas have to consider markets that represent a core growth segment for their business, where investors can better understand and evaluate their business model, and where many comparable companies are listed,

“They should also consider which market has sector-specific analyst expertise to attract investors within their sector,” she added.

Looking towards the future of the IPO market in the region, she noted expected interest rate cuts alongside easing inflation may create a more favorable environment for IPOs in the years ahead.

“Southeast Asia’s strong consumer base, growing middle class, and strategic importance in sectors like real estate, healthcare, and renewable energy remain attractive to investors,

“As foreign direct investment continues to flow into the region, 2025 is poised to be a year of renewed IPO activity across Southeast Asia,” she added.

#SoutheastAsiaIPO #StockMarket2024 #RenewableEnergyIPO #EmergingMarkets #IPORebound2025 #Ifvex