IPOs in Vietnam have led the way in 2018, making up more than half ($6.2 bn) of the total $12 bn raised across South East Asia, according to Deloitte.
Across the South East Asia region, Vietnam and Thailand dominated with three major listings in 2018.
Vietnamese real estate developer Vinhomes Joint Stock Company took the top spot with $3.6 bn raised, followed by Thailand Future Fund, which raised $1.8 bn and Vietnam Technological and Commercial Joint Stock Bank with $1.2 bn.
The rise of Vietnam’s capital market has been largely attributed to a number of factors: the Vietnam government’s privatization program and market reforms, strong interest from foreign investors and local funds, and a high GDP growth rate of 6.8 percent in 2018.
In comparison, Singapore Exchange (SGX) raised a total of $715 mn across 13 IPO deals up to November 2018, which is 85 percent lower than the $4.6 bn raised for the full year in 2017.
This figure includes two company IPOs and one trust on SGX’s main board with $134 mn and $422 mn in funds raised, respectively, Deloitte notes. On the Catalist board – the secondary board of the SGX – 10 deals raised $159 mn.
This follows the downward trend seen in Q2 2018 when Singapore’s IPOs crashed 20 percent to $561.12 mn, with the number of IPOs plunging 30 percent to a mere seven. In Q1, the number of IPOs crashed 67 percent year on year while their proceeds fell 89 percent to $137.53 mn.
That said, Tay Hwee Ling, global IFRS and offerings leader at Deloitte South East Asia and Singapore, suggests caution in reading too much into the numbers. ‘Vietnam’s performance in 2018 cannot directly be compared to Singapore and Hong Kong, as it is not an apples-to-apples comparison,’ she says in a statement.
‘The Vietnam government has embarked on an ambitious privatization drive and plans for market reform, which has pushed IPO activities in particular for the bigger government-linked organizations that have not been privatized and are seeking funds to grow and expand.’
Tay highlights some developments in 2018 that may help increase the vibrancy of Singapore’s capital markets and see them bounce back in 2019. ‘These include the ability for companies with dual-class share structures to seek primary listings on SGX,’ she explains. ‘This strikes a balance between supporting high-growth companies and having safeguards to mitigate governance risks, and can broaden the range of investment options.’
