Deloitte reports that Southeast Asia’s IPO market is favored by investors despite global challenges

In a recent report by Deloitte, it is noted that Southeast Asia’s initial public offering (IPO) market is demonstrating positive indications, even amid a global slowdown in IPO activity during the first half of 2023.

During the past six months, Southeast Asia’s market witnessed 85 IPOs, generating $3.3 billion in proceeds. In comparison, the same period last year saw 73 IPOs that raised $3.1 billion.

During the first half of 2023, there was a notable increase in both the number of initial public offerings (IPOs) and the proceeds generated. Specifically, there was a 16% rise in the quantity of IPOs and a 5% growth in the amount of funds raised through these offerings.

According to the report, Southeast Asia’s positive growth prospects have made the region an attractive choice for investors. Factors such as the reopening of the region, the recovery of the tourism industry, and robust domestic demand have led to an influx of foreign direct investment.

Despite the prevailing global economic uncertainties, these factors have collectively contributed to the region’s positive economic growth.

The notable improvement can be primarily attributed to three IPOs in Indonesia, each raising over $500 million. This is in contrast to the previous year’s same period, which saw only one significant IPO, GoTo (the merged entity of Gojek and Tokopedia), raising $1 billion.

On the other hand, the Nasdaq, which is known for its focus on technology companies, has not witnessed any significant venture-backed tech IPOs since the debut of software vendor HashiCorp in December 2021.

According to a report by EY, there has been a global IPO slowdown during the first half of 2023, with a 5% decrease in the number of IPOs compared to the same period last year. Additionally, proceeds have experienced a significant decline of 36% year-on-year.

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In the first half of 2023, Indonesia demonstrated its emergence as a prominent player in the IPO market by contributing a significant 70% of the total IPO proceeds in Southeast Asia.

The IPO market in Indonesia showcased three notable listings, featuring nickel company PT Trimegah Bangun Persada Tbk, minerals and EV battery materials firm PT Merdeka Battery Materials Tbk, and geothermal power plant operator PT Pertamina Geothermal Energy Tbk.

President Joko Widodo of Indonesia has implemented measures to establish the country as a global hub for the electric vehicle supply chain. These efforts include signing agreements with Australia to collaborate on the production of key EV minerals such as lithium and nickel.

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