Vietnam tops Southeast Asia in IPOs
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Vietnam surpassed Singapore and Thailand to top Southeast Asia in initial public offerings (IPOs) last year, raising $2.6 billion. This figure was 3.7 times that of 2017, according to consultancy Ernst & Young. Two of three largest IPOs in Southeast Asia last year were launched by Vietnamese companies: $1.34 billion from Vinhomes, a real estate developer of Vietnam’s biggest private firm Vingroup; $923 million from Techcombank, the country’s largest private sector lender.
However, an opposite trend was seen in Southeast Asia as a whole, with the money raised from IPOs dropping 34 percent over 2017 to $7.1 billion.
The number of IPO deals in the region also decreased by 7 percent to 115, with 56 of them raising less than $10 million.
Ernst & Young economist Max Loh said that the reason for this drop was U.S-China trade tensions, which affected the capital market in the region, as Southeast Asian countries have close trade relationships with China.
Experts feel Vietnam has the potential to attract more foreign investments in the future. A report by law firm Baker McKenzie and consultancy Oxford Economics said that Vietnam will top the region in the amount of money raised via IPOs by 2021.
The rise of Vietnam and other developing countries in Southeast Asia could intensify competition for new listings among the region’s exchanges, said Tham Tuck Seng, PwC Singapore’s capital markets leader.
This will increase the pressure on Singapore to differentiate itself even more in order to stand out, CNBC quoted Tham as saying.
Questions & Answers
Q.What was the total value of initial public offerings across Southeast Asia last year?
What was the total value of initial public offerings across Southeast Asia last year?
Money raised from IPOs in Southeast Asia as a whole dropped by 34 percent over 2017 to $7.1 billion last year. The region saw 115 IPO deals completed during this period.
Q.What is the primary reason given for the overall decline in IPO money raised in Southeast Asia?
What is the primary reason given for the overall decline in IPO money raised in Southeast Asia?
Ernst & Young economist Max Loh attributes the drop to US-China trade tensions. These tensions impacted the capital market because Southeast Asian countries have close trade relationships with China.
Q.How did the number of IPO deals in Southeast Asia change last year compared to the previous year?
How did the number of IPO deals in Southeast Asia change last year compared to the previous year?
The number of initial public offering deals across the region decreased by seven percent. Out of the 115 deals completed, 56 raised less than $10 million each.
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