southeast asia ipo capital market...capital markets across southeast asia achieved market...
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Southeast Asia IPO capital market 2020 Full Year Report
02
Brochure / report title goes here | Section title goes here
Southeast Asia IPO Market overview 03
Biggest IPOs of 2020 07
SEA IPO Market outlook 08
Country in focus: Thailand 10
Country in focus: Malaysia 13
Country in focus: Indonesia 15
Country in focus: Singapore 17
Evolution of REITs in Southeast Asia 21
03
Southeast Asia IPO capital market | Southeast Asia IPO Market overview
Southeast Asia IPO Market PerformanceCapital markets across Southeast Asia achieved market capitalisation of US$29.1 billion, having produced 114 initial public offerings (IPOs) which raised US$7.0 billion in funds.
Although the number of IPOs had decreased by 29% from 161 to 114 IPOs, the total IPO amount raised remained consistent at US$7 billion. In fact, total IPO market capitalisation in 2020 had increased by 16%, giving a strong signal to the potential influx of new exciting large-cap companies with higher valuations in the Southeast Asia IPO market.
Market overview
Year-on-year Summary
20 5
40 10
60 15
80 20
100 25
Num
ber o
f IPO
s
Fund
s ra
ised
/ M
arke
t Cap
(US$
bill
ions
)
120 30
140 35
160 40
180 45
200 50
– –2016 2017 2018 2019 2020
No. of IPOs 113 178 151 161 114
Funds raised 6 10 10 7 7
Market Cap 19 33 46 25 29
04
Southeast Asia IPO capital market | Southeast Asia IPO Market overview
Number of IPOs Year-on-year
IPO Market Capitalisation Year-on-year
Market overview by country
Indonesia Malaysia Philippines Singapore Thailand Vietnam Total
2016 16 12 4 16 27 38 113
2017 37 13 4 20 46 58 178
2018 57 22 1 15 23 33 151
2019 55 30 4 11 34 27 161
2020 51 19 4 11 28 1 114
Indonesia Malaysia Philippines Singapore Thailand Vietnam Total
2016 4,348 942 3,911 3,228 4,497 1,704 18,630
2017 3,249 3,939 2,470 6,219 13,537 3,830 33,244
2018 5,998 683 763 2,168 5,355 31,103 46,070
2019 5,071 1,954 1,337 3,176 12,685 939 25,162
2020 2,484 2,900 3,045 2,835 17,590 285 29,139
IPO
Mar
ket C
ap (U
S$ m
illio
ns)
2,000
4,000
6,000
8,000
10,000
32,000
2016 2017 20192018 2020
05
Southeast Asia IPO capital market | Southeast Asia IPO Market overview
IPO Funds Raised Year-on-year
Indonesia Malaysia Philippines Singapore Thailand Vietnam Total
2016 922 366 921 1,662 1,502 195 5,568
2017 1,024 2,219 473 3,492 2,912 304 10,424
2018 1,132 166 153 551 2,850 4,667 9,519
2019 1,052 447 407 2,263 2,996 172 7,337
2020 377 490 809 968 4,356 9 7,009
Key Highlights in SEAIn spite of the Covid-19 pandemic which affected the global economy in 2020, three of the six major Southeast Asian markets outperformed 2019 in terms of IPO funds raised. Most countries had at least one marquee listing that was the silver lining to an otherwise subdued year in the IPO market. Thailand continued to outperform its regional peers in terms of the amount of funds raised and the size of its companies’ market capitalisation.
Not only did Thailand raise the most funds in Southeast Asia, accounting for 62% of total funds raised across Southeast Asia in 2020, it also broke the US$3 billion mark for the first time since 2016 with total proceeds of US$4 billion. This represented a 45% increase over the previous year and with a strong pipeline for 2021, it does not seem to be letting up any time soon.
Singapore came in second despite fewer IPO transactions, contributing to 14% of all funds raised in the region. It also reinforced its stature as an attractive listing destination for foreign companies; 61% of IPO proceeds were raised by companies with foreign operations. The Singapore Exchange (“SGX”) also saw its first “tech unicorn” IPO with a US$1.3 billion valuation.
The Philippines outperformed itself with nearly double the amount of funds raised and IPO market capitalisation in 2020 as compared to 2019. It capped off an impressive year with the introduction of its very first REIT listing in the market.
While there were fewer listings in 2020, total IPO market capitalisation did jump by nearly 48% on the back of a listing by a large international home improvement chain, Mr DIY. The local Government also introduced new incentives for growth companies to list.
Indonesia topped the charts again with the highest number of IPO transactions in Southeast Asia, for the third year in a row. There was a total of 51 new IPOs, contributing to 45% of the total listings in the region. It also saw the first listing of growth stock under the Acceleration Board.
With the establishment of the Vietnam Stock Exchange as a parent company to the existing Hanoi and Ho Chi Minh City Stock Exchanges, it will streamline the management system and use of harmonised technologies, criteria for listing, reporting and disclosing information. The country is also poised for the quickest economic recovery, thanks to an effective Covid-19 response.
-
500 1,000
1,500 2,000
2,500 3,000
3,500
4,000 4,500
5,000
Fund
s ra
ised
(US$
mill
ions
)
2016 2017 2018 2019 2020
06
Southeast Asia IPO capital market | Southeast Asia IPO Market overview
Average market capitalisation per IPO in Southeast Asia
The above table illustrates all the factors, such as the volume of listings, volume of funds raised and total market capitalisation for comparison across the markets.
Thailand led all but one country in the number of IPOs in 2020, and also towered over the rest with the amount of funds that had been raised. Its average market capitalisation was also much larger than the Southeast Asian counterparts as it saw several successful IPOs from some of the country’s largest corporations.
Similarly, Philippines also welcomed several companies with large market capitalisations.
And while Indonesia saw a voluminous turnout, most listings were small and had low market capitalisation. This comes on the back the Indonesian’s Government efforts to encourage more growth companies to list on the country’s non-primary stock exchanges.
ID
MY
PH
SG
TH
VN
0
100
200
300
400
500
600
700
800
900
- 10 20 30 40 50 60
Ave
rage
mar
ket c
ap p
er IP
O
No. of IPOs in 2020
Indonesia Malaysia Philippines Singapore Thailand Vietnam
Size of funds raised
Fewer listings; higher market cap
Fewer listings; lower market cap
More listings; higher market cap
More listings; lower market cap
07
Next 7 biggest IPOs of 2020 in Southeast Asia
#1 Central Retail Corporation Public Corporation Public Company LimitedTHAILAND
A family-owned business, with hundreds of malls, electronics, grocery and 24-hour convenience stores across the country. Over the years, the company has acquired several luxury shopping brands in Europe and is now looking to make inroads into the online sales market. Its initial public offering puts the firm amongst Thailand's largest public companies.
Date of listing: 20 February 2020 Funds raised: US$ 1,767,000,000 IPO Market cap.: US$ 8,004,000,000
#2 SCG Packaging Public Company Limited THAILAND
The business is focused on becoming a leader of total packaging solutions in the ASEAN region and has been expanding its food packaging business over the years. It is a subsidiary of the Siam Cement Group, which is the second-largest and oldest cement company in Thailand.
Date of listing: 22 October 2020 Funds raised: US$ 1,266,000,000 IPO Market cap.: US$ 4,774,000,000
PHILIPPINES
#3 Converge Information and Communications Technology Solutions, Inc.
A telecommunication service provider which operates fibre optic broadband networks, cable television and cable internet. It has a congressional franchise to construct, install, maintain and operate in the Philippine information and communications system for 25 years until 2034. The company holds 54% of the market share of fibre to homes in the country, and boasts over 900 thousand subscribes across 200 cities in the Luzon region (includes Metro Manila).
Date of listing: 26 October 2020 Funds raised: US$ 523,000,000 IPO Market cap.: US$ 2,330,000,000
Rank Country of Listing Company Date
of listingFunds raised
(US$ mil) IPO market cap (US$ mil) Industry
#4 ThailandSri Trang Gloves (Thailand)
Public Company Limited02-Jul-20 475 1,548 Consumer Business
#5 Malaysia MR D.I.Y. Group (M) Berhad 26-Oct-20 362 2,415 Consumer Business
#6 SingaporeNanofilm Technologies International Limited
30-Oct-20 345 1,250 Industrial Products
#7 Singapore United Hampshire US REIT 12-Mar-20 310 395 Real Estate
#8 ThailandKerry Express (Thailand) Public Company Limited
24-Dec-20 281 1,628 Consumer Business
#9 Philippines Areit, Inc. 13-Aug-20 255 543 Real Estate
#10 Singapore Elite Commercial REIT 06-Feb-20 169 291 Real Estate
Biggest IPOs of 2020
Southeast Asia IPO capital market | Biggest IPOs of 2020
08
Southeast Asia IPO capital market | SEA IPO Market Outlook
In comparison to:
Source: (1) World Bank – 2020 estimated forecast per January 2021 report (2) Asian Development Bank – Asian development outlook supplement December 2020 report (3) www.tradingeconomics.com – Australia GDP annual growth rate as at December 2020
Southeast Asia Economic ProspectsThe outbreak of COVID-19 has necessitated the implementation of stringent policy measures, setting off a global economic crisis of unprecedented magnitude. With the number of COVID-19 cases globally still increasing significantly in several regions, it remains to be seen whether the vaccine will tame the spread of the virus, and consequently its impact on the economy.
Of the six Southeast Asian countries in our report, Vietnam is the only one with a positive GDP full year forecast, albeit a sharp dip from 2019; there is been a tightening for the other SEA countries, with contractions in all five countries' forecast GDP growth.
SEA IPO Market Outlook
Indonesia: -2.2% (2019: 5.0%) (1)
Passing of OMNIBUS lawPrivatisation of State-Owned
Enterprises
Singapore: -6.2% (2019: 0.7%) (2)
Companies in the pipeline for SGXPositive impact to some sectors
amidst Covid-19
Thailand: -6.5% (2019: 2.4%) (1)
Strong pipeline amidst concernon macro environment mainly from a sharp decline in tourism industry
Vietnam: 2.8% (2019: 7.0%) (1)
Proactive Covid-19 measuresWas not as hard hit by the virusImproving regulatory environment
Malaysia: -5.8% (2019: 4.3%) (1)
Economy impacted by drawn out lockdownsTourism and manufacturing hit hardLow expectations for rebound
Philippines: -8.1% (2019: 6.0%) (1)
High economic costs of containing the virusSome optimism for a strong rebound in the coming months
China 2.0% (1)
(2019: 6.1%)
USA -3.6% (1)
(2019: 2.2%)
Europe -7.4% (1)
(2019: 1.3%)
Japan -5.3% (1)
(2019: 0.5%)
Hong Kong-5.5% (2)
(2019: -1.2%)
Australia-3.8% (3)
(2019: 1.6%)
09
Southeast Asia IPO capital market | SEA IPO Market Outlook
Volume of listings and funds raised per quarter in Southeast Asia
“Five out of ten of the largest IPOs in Southeast Asia took place in Q4 2020. This could be due to the fact that companies had merely temporarily paused their IPO plans as they ride out the Covid-19 pandemic. It lends a good momentum for a positive outlook for the start of 2021.”
Ms Tay Hwee Ling, Disruptive Events Advisory Leader, Deloitte Southeast Asia and Singapore
The year started strongly with the listing of Thailand’s Central Retail Corporation Public Company Limited in February, one of the largest IPO of the year. With talks of more IPOs in the pipeline, 2020 was shaping up to be a very fruitful year in the capital markets. Unfortunately, the virulent spread of Covid-19 across the globe in March quickly placed a damper on it and the subsequent efforts from all governments to contain the spread meant that all transactions screeched to a stop in April.
Half a year on, the capital markets have since seen a sharp V-shape recovery. Companies have begun resuming their IPO plans and some have successfully listed in late-2020. With more and more countries cautiously reopening and with the administering of vaccines globally, the outlook of 2021 remains to be seen.
500
1,000
1,500
2,000
2,500
3,000
3,500
0
2,495
104
1,119
3,291
Volume of funds raised
10
20
30
40
0
33 3534
12
Volume of listings
10
Southeast Asia IPO capital market | Country in Focus: Thailand
Thailand IPO Performance Year-on-year
“Thailand’s IPO market continues to show its growth potential as one of the stronger IPO markets in Southeast Asia. Largely driven by home-grown companies and fuelled by increasing investor interests in firms focused on consumer businesses, it continues to appeal strongly to investors and fund managers.”
Ms Wilasinee Krishnamra, Disruptive Events Advisory Leader, Deloitte Thailand
Thailand IPO Market PerformanceWhile setbacks from Covid-19 meant that Thailand could not match the record from previous year for number of listings, it did raise more funds and welcomed firms with larger market capitalisation in 2020.
The country saw only 28 listings in 2020, a decrease of 18% from prior year. Yet the total funds raised and total IPO market capitalisation increased by 45% and 39% respectively, as compared to 2019.
The total funds raised in the Thailand Stock Exchange amounted to over 62% of all funds raised in SEA in 2020, a large step ahead of its peers. The price-earning ratio of Mainboard listings averaged at about 32.5 times earnings.
Country in Focus: Thailand
Our Insights
2,000
23
2,850
12,685
17,590
5,355
34 28
4,000
6,000
8,000
10,000
US$
mill
ons
12,000
14,000
16,000
18,000
–2000 2019 2020
2,996
4,356
Number of IPO Amount raised Market cap.
11
Southeast Asia IPO capital market | Country in Focus: Thailand
Top 10 IPOs by Market Capitalisation in Thailand
# Company BoardListing
dateFunds raised
(US$ mil) IPO market cap (US$ mil)
Industry
1Central Retail Corporation Public Company Limited
SET 20-Feb-20 1,767 8,004 Consumer Business
2SCG Packaging Public Company Limited
SET 22-Oct-20 1,266 4,774 Industrial Products
3Sri Trang Gloves (Thailand) Public Company Limited
SET 02-Jul-20 475 1,548 Consumer Business
4Kerry Express (Thailand) Public Company Limited
SET 24-Dec-20 281 1,628 Consumer Business
5Saksiam Leasing Public Company Limited
SET 08-Dec-20 67 259 Financial Services
6Siamese Asset Public Company Limited
SET 25-Dec-20 28 204 Industrial Products
7NR Instant Produce Public Company Limited
SET 09-Oct-20 43 200 Consumer Business
8Earth Tech Environment Public Company Limited
Mai 18-Aug-20 50 188 Energy and Resources
9J.R.W. Utility Public Company Limited
SET 30-Nov-20 36 138 Technology, Media and
Telecommunications
10Khonburi Sugar Power Plant Infrastructure Fund
SET 24-Aug-20 90 90 Energy and Resources
Thailand dominated Southeast Asia’s initial public offering market in 2020, contributing more than 62% of total fund raised in the region. Despite the economic due to the outbreak of COVID-19, the listings of several home- grown companies in Thailand led the country to take the top spot in Southeast Asia’s IPO market. Central Retail Corporation Public Company Limited was the biggest IPO of the year in Southeast Asia, followed by another Thai company – SCG Packaging.
Thailand could see the momentum in IPO activity into the next year due to the easing of rules to open up Thai stock market to listings from foreign firms. The first pilot list is expected to see in 2021. In addition, The Stock Exchange of Thailand plans to launch a new stock market for start-ups and small and medium-sized enterprises (SMEs).
There are currently many companies in the pipeline to go public in next year led by PTT Oil and Retail Business, followed by Don Muang Tollway which operates elevated toll road and Ngern Tid Lor which is a non-bank that provides personal loan.
12
Southeast Asia IPO capital market | Country in Focus: Thailand
Percentage of IPO funds raised in Thailand in 2020, analysed by industry
The consumer business industry represents the largest fund raised through IPO in 2020 leading by Central Retail Corporation, the country’s largest retail department store operator and followed by Sri Trang Gloves and a parcel transporter, Kerry Express (Thailand). Both Sri Trang and Kerry Express’s business have been on an upward trend due to high demand for medical gloves, and a shift of consumer behavior from brick-and-mortar stores to online shopping.
Industrial Products was the second-largest industry by funds raised in 2020, led by SCG Packaging providing packaging services and solutions. Its business had inadvertently benefited from the COVID-19 pandemic due to increased demand for takeaway food containers and cardboard shipping boxes.
Energy and resources
Real estate
Financial services
Technology, media and telecommunications
Consumer business
Industrial products
13
Southeast Asia IPO capital market | Country in Focus: Malaysia
Malaysia IPO Market PerformanceThe long anticipated public offering of Mr D.I.Y Group (M) Berhad had raised over US$362 million in 2020, making it the largest IPO in the recent three years. With this in the bag, Bursa Malaysia mustered more funds raised compared to 2019, despite the subdued market activity.
Bursa Malaysia saw only 19 listings in 2020, which is nearly two-third of 2019 with a slight increase of 10% in funds raised over the previous year. Nevertheless, Malaysia IPO market capitalisation jumped by 48% in 2020.
Country in Focus: Malaysia
Malaysia IPO Performance Year-on-year
While there were fewer IPO transactions in 2020, it was the opposite for retail investors participation. In a low interest rate environment, investors have looked to the stock markets for greater yields. The average trading volume has increased by approximately 86% and 208% for Q2 and Q3 2020 as compared to the same quarter in 2019.
“The high trading volume with buying momentum should remain strong where investors are generally looking at stock specific rather than sectors, especially those related to technology and healthcare.”
Mr Wong Kar Choon, Disruptive Events Advisory Leader, Deloitte Malaysia
Our Insights
500
22166
1,954
2,900
683
30 19
1,000
1,500
2,000
2,500
US$
mill
ons
3,000
–2018 2019 2020
447490
Number of IPO Amount raised Market cap.
14
2
7
10
Number of IPOs per Board in Malaysia
Southeast Asia IPO capital market | Country in Focus: Malaysia
Innature Berhad and Mr. D.I.Y. Group (M) Berhad both raised a total amount of US$389 million and recorded total market capitalisation of US$2.52 billion upon listing.
Mr. D.I.Y Group (M) Berhad is also ranked fifth out of the top 10 biggest IPO in Southeast Asia. Its share price has recorded an appreciation of 95% with total market capitalisation of US$4.88 billion as of 31 December 2020.
Mainboard
Amount raised of US$16 million and recorded total market capitalisation of US$76.75 million upon listing
Leap
Amount raised of US$85 million and recorded total market capitalisation of US$300.97 million upon listing
Ace
Tax deduction
Effective from the year of assessment 2020 to 2022, listings of eligible technology-based companies on the ACE and LEAP Market are eligible for a tax deduction of up to RM1.5 million on the following listing costs:
01. Fees to authorities02. Professional fees; and03. Underwriting, placement and brokerage
Economic Stimulus Package 2020
Listing fee waivers to encourage growth in fund-raising activities through listings on the Exchange.
Processing feeApplicable for IPO applications for listings on the ACE Market and the LEAP Market. The fee waiver will be granted for submission made within 12 months from 27 February 2020.
Initial listing and annual listing feesApplicable to listings of corporations on the ACE Market, LEAP Market and on the Main Market for corporations with estimated market capitalization of less than RM500 million for companies listed within 12 months from 27 February 2020
15
Indonesia IPO Market PerformanceFor the third year running, Indonesia led the Southeast Asia region again with the highest number of IPO transactions, although there were 51 listings compared to 55 listings in 2019, or a 7% decline.
However, the amount of funds raised was far less than the US$1.0 billion raised in 2019, a marked decrease of 64%. Total IPO market capitalisation has likewise declined by 51% as compared to 2019..
Country in Focus: Indonesia
Indonesia IPO Performance Year-on-year
The Indonesian government has taken steps in recent years to improve investment climate in Indonesia and encourage local companies to raise funds from the capital market. One way is by reducing corporate tax rates to bring them in line or even lower as compared to its regional peers. There are also ongoing efforts to push state-owned enterprises to publicly float their shares.
1,000
57
1,132
5,071
2,484
5,998
55 51
2,000
3,000
4,000
5,000
US$
mill
ons
6,000
–2018 2019 2020
1,052
377
Number of IPO Amount raised Market cap.
Southeast Asia IPO capital market | Country in Focus: Indonesia
16
Southeast Asia IPO capital market | Country in Focus: Indonesia
“The increase in the number of IPO transactions in Indonesia reflects the government’s active efforts to deepen its capital market, through inter alia, cutting down licensing and bureaucratic processes and offering tax incentives for listed companies. We expect the number of IPO transactions next year to remain strong.”
Mr Joe Lai, Disruptive Events Advisory Leader, Deloitte Indonesia
Our Insights
Main Board 2016 2017 2018 2019 2020
Number of IPO 3 7 17 10 8
Total Amount Raised (US$ million) 276 288 508 556 63
Total Market Cap. (US$ million) 2,229 890 3,226 2,368 1,007
Development Board 2016 2017 2018 2019 2020
Number of IPO 13 30 40 45 38
Total Amount Raised (US$ million) 646 736 624 496 302
Total Market Cap. (US$ million) 2,119 2,359 2,772 2,703 1,415
Acceleration Board 2016 2017 2018 2019 2020
Number of IPO N/A N/A N/A N/A 5
Total Amount Raised (US$ million) N/A N/A N/A N/A 12
Total Market Cap. (US$ million) N/A N/A N/A N/A 62
In terms of amounts raised, the sectors that dominated the IPO transactions are consistent with prior years, namely the consumer business, real estate and financial services, with the addition of the health care sector this year. The largest amount raised during the year was by PT Metro Healthcare Indonesia Tbk, a company in the healthcare sector.
In prior years, the Indonesia Stock Exchange introduced the Acceleration Board to encourage more small and medium enterprises to raise funds from the capital market. We saw the result of that through the five companies listed on the Acceleration Board this year.
We also saw several regulatory changes to the benefit of Indonesian companies. The recent omnibus law which reduced the licensing requirements and certain bureaucratic processes is expected to boost the economy. In addition to that, the corporate tax rate has been decreased from 25% in 2020 to 22% in 2021, and will reduce further to 20% in 2022. Listed companies can enjoy a further reduction of 3% if they meet certain criteria.
17
Singapore IPO Market PerformanceThe impact of Covid-19 and the subsequent government measures to contain it, dubbed the “Circuit Breaker” which lasted forapproximately 2 months between April and June 2020, led to a quieter year in the stock market for IPO transactions.
Country in Focus: Singapore
Total funds raised fell by 57%, from US$2.3 billion to US$1.0 billion and total IPO market capitalisation declined by 11%, from US$3.2 billion to US$2.8 billion.
However, there were a few bright spots. There were three companies with SGX Mainboard listings in 2020 compared to none in 2019. The three Mainboard IPOs raised US$458 million (S$620 million), which was the best showing in the last five years.
SGX also maintained its stronghold on being the undisputed leader in REITs and Property Trusts in the region. Two new REITs were listed on the bourse, which raised US$479 million (S$678 million) and boasted a total market capitalisation of US$686 million (S$969 million) upon listing. The 43 REITs and Property Trusts on SGX are valued at over S$100 billion, making it the largest REIT market in Asia (excluding Japan).
Singapore IPO Performance Year-on-year
500
15
551
3,1762,835
2,168
11 11
1,000
1,500
2,000
2,500
US$
mill
ons
3,000
3,500
–2018 2019 2020
2,263
968
Number of IPO Amount raised Market cap.
Southeast Asia IPO capital market | Country in Focus: Singapore
18
Southeast Asia IPO capital market | Country in Focus: Singapore
18
# Company SGX Board Listing date Funds raised(US$ mil)
IPO market cap (US$ mil) Industry Country of
operations
1Resources Global Development Limited
Catalist 31-Jan-20 2 13Energy and Resources
Indonesia
2 Elite Commercial REITMainboard-REIT
06-Feb-20 169 291 Real EstateUnited Kingdom
3 Don Agro International Ltd Catalist 14-Feb-20 4 24Consumer Business
Russia
4 Memiontec Holdings Ltd Catalist 05-Mar-20 5 35Energy and Resources
Singapore
5 United Hampshire US REITMainboard-REIT
12-Mar-20 310 395 Real Estate United States
6Southern Alliance Mining Ltd
Catalist 26-Jun-20 14 88Energy and Resources
Malaysia
7Singapore Paincare Holdings Limited
Catalist 30-Jul-20 4 26Life Sciences and Healthcare
Singapore
8Nanofilm Technologies International Limited
Mainboard 30-Oct-20 345 1,250 Technology Singapore
9 Credit Bureau Asia Limited Mainboard 03-Dec-20 21 162 Financial Services
Singapore
10 Aedge Group Limited Catalist 11-Dec-20 2 15 Consumer Business
Singapore
11G.H.Y Culture & Media Holding Co., Limited
Mainboard 18-Dec-20 92 536 Consumer Business
China
2020 Total Count: 11 968 2,835
The Singapore stock market saw a flurry of activities right off the bat in Q1 2020, as it welcomed five new listings, of which two were REITs. The total monies raised in this quarter was a hefty US$490 million, which dwarfed the US$29 million of funds raised in Q1 2019. It was therefore no surprise that investors were gearing up for a big year in 2020.
Unfortunately, Covid-19 cast a pall over the market, with just two IPOs in the next six months raising US$18 million. However, the market picked up again in October as aspiring listing applicants came back in force, raising US$460 million in the last quarter, rivalling Q1 2020 results.
Among the heavyweights was the IPO of Nanofilm Technologies International Limited. With a market capitalisation of US$1.3 billion and a price-earning ratio of 41 times, some have called it the first “tech unicorn” in Singapore. The introduction of a new large-cap technology stock in an otherwise REIT-dominated SGX naturally pipped the interest of many investors, fuelling talks of more technology start-ups and growth stock in the future.
19 19
Percentage of IPO funds raised in Singapore in 2020, analysed by industry
The Real Estate industry continues to provide the larger part of funds raised through an IPO and SGX remains the regional hub for REITs and Property Trusts. The funds raised by the two REITs, United Hampshire US REIT and Elite Commercial REIT, amounted to US$479 million or 50% of all funds raised in 2020.
The technology industry saw a large jump in funds raised in 2020. Not surprisingly, it was thanks to the listing of Nanofilm Technologies International Limited, whose US$345 million IPO singlehandedly contributed to 36% of all funds raised in 2020.
“In a time of crisis, companies can find new growth by making fundamental changes to their business model. Sectors like healthcare and its suppliers have benefitted from the COVID-19 pandemic. Investors have also responded to the crisis and are adapting to the next normal – we have seen a significant increase in trading activities as the pandemic unfolded during the lockdowns. The use of technology for virtual IPO roadshows have allowed companies to break down barriers, gaining access to a wider pool of investors.”
Ms Tay Hwee Ling, Disruptive Events Advisory Leader, Deloitte Southeast Asia and Singapore
Our Insights
Consumer business
Energy and resources
Technology
Real estate
Southeast Asia IPO capital market | Country in Focus: Singapore
12%
2%
50%
36%
20
Southeast Asia IPO capital market | Country in Focus: Singapore
Key events and highlights in the Singapore capital market in 2020
Plucky PerformanceThe SGX performed relatively well despite the set backs from Covid-19, pulling through the year with three companies and two
REITs listing on the Mainboard, and six companies listing on the Catalist Board. The Singapore IPO capital market has raised more funds from companies listing on the Mainboard in 2020, than in the last five years.
Foreign PartnershipSGX regulatory arm (“SGX RegCo”) signed a Memorandum of Understanding with Nasdaq in July 2020 that reaffirms both
stock exchanges’ partnership in cooperating on regulatory matters, including a streamlined framework for issuers seeking a secondary listing on either exchange.
Resilience and StabilityUnder the Government mandate, Singapore was able to rein in the continued spread of Covid-19, which was initially proving difficult
to stop in a dense city-state. This eventually resulted in the gradual re-opening of the economy, as we continue to remain vigilant and cautious.
REITs LeaderWith another two REITs under its belt and a total market valuation of over S$100 million, SGX remains the undisputed leader in the Southeast
Asia region and a global hub for Asia (ex Japan) when it comes to attracting REITs to Singapore’s doorstep.
21
Evolution of REITs in Southeast AsiaOverview of REITs and Property Trusts in Southeast Asia
No REIT listing
59 REITs and property trusts. Almost all assets held are domestic
Welcomed its very first REIT, AREIT Inc., in 2020
REIT regulatory framework established in 2016.
11 REITs listed in total.
43 REITs and property trusts valued at over S$100 billion.Largest REIT market in Asia (ex Japan)
18 REITs, of which 4 are Shariah compliant, with market cap of about RM40.4 billion
Southeast Asia IPO capital market | Evolution of REITs in Southeast Asia
22
Southeast Asia IPO capital market | Evolution of REITs in Southeast Asia
Percentage of funds raised in 2020, analysed by industry
REITs have also slowly moved away from non-traditional types of real estate assets.
The trend is likely to continue in the future, judging by the two new REITs in 2020, one of which is a U.S. grocery anchored and necessity-based retail and self-storage properties REIT.
At the start, almost all REITs were domestic, providing
investors the safe investments that they were familiar with.
Over time, investors’ appetite grew, and REITs started to comprise with foreign assets “closer to
home”. 19 REITs which started with fully local assets have now have diversified and acquired foreign assets.
Today, there are REITs with 100% offshore assets. 39 of Singapore’s 43 REITs own at least
some offshore assets globally.
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20162013 20172014 20182015 2019 2020so far
Multi-region Rest of SEA Rest of East Asia EuropeChina/Hong Kong U.S. South Asia Australia/NZ
Local and foreign - Singapore and multi-regionLocal only - Singapore
2 2 2 2
2
1
1
1
1
1
1
1
1
1
1
1 1 1 1
1 1
1 1 3
1 1
1
1
14 3
1
3
1
4
1 1
Foreign only:
Fully local-based assets
Emergence of pure foreign assets 'closer to home' in Asia
Shift towards Europe and U.S. in recent years
Hospitality17%
Commercial17%
Industrial18%
Diversified13%
Non-traditional
11%
Retail24%
Data centres2%
Others4%
Healthcare5%
Non-traditional assets
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Diversity of Assets in Malaysia
First Shariah compliant REIT (i-REIT) in the world, Al-Aqar REIT was launched in June 2006 by the Johor Corporation. Started with 6 hospital assets, the number of assets has since grew to 23 with total value of RM1.57b.
First restructuring of conventional REIT, Axis REIT which converted into i-REIT in 2008, is the world’s first Islamic REIT with industrial and office properties.
While conventional REIT and i-REIT are fundamentally the same, the income of i-REIT:
• Must be from Shariah permissible activities; or
• In case of mixed activities, must adhere to 20% benchmark as determined by the Shariah Advisory Council of Securities Commission of Malaysia
Shariah committee or advisor must be appointed to advise the fund manager on Shariah compliancy matters.
i-REIT has created the opportunity for Muslim investors and institutions who seek to invest in investments that naturally fit with the Islamic finance principles.
ServicesDiversified
25%
75%
Hospitality
Industrial and warehouse
Diversified
Retail and office
7% 14%
7%
72%
Conventional REITI-REIT
22%
78%
Southeast Asia IPO capital market | Evolution of REITs in Southeast Asia
Southeast Asia IPO capital market | Section title goes here
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“COVID has made companies revaluate their business and growth forecast; and companies are looking into windows of opportunity to raise funds from stock markets to support their growth and stay resilient in this challenging climate. Although we are not out of the woods yet, the listing markets in Southeast Asia are still dynamic and attractive to investors.”Ms Tay Hwee Ling, Disruptive Events Advisory Leader, Deloitte Southeast Asia and Singapore
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Southeast Asia IPO capital market | Contact us
Contact usTo find out more, please contact the respective DEA Country Leaders:
Southeast Asia and SingaporeTay Hwee LingLeader, Disruptive Events Assurance [email protected]+65 6216 3258
IndonesiaJoe [email protected]+62 21 5081 8009
MalaysiaWong Kar Choon [email protected]+60 3 7610 8820
MyanmarCho [email protected]+95 96 7980 6766
PhilippinesBaltazar Wilfredo [email protected]+63 2 581 9000 ext 011
ThailandKrishnamra Wilasinee [email protected]+66 2034 0149
VietnamNam Pham [email protected]+84 24 710 50599
Southeast Asia IPO capital market | Section title goes here
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