Daily Management Review

Vietnam Beats Singapore To Become Largest IPO Market In Southeast Asia In 2018


12/28/2018




Vietnam Beats Singapore To Become Largest IPO Market In Southeast Asia In 2018
The position of the leader in Southeast Asia's top grossing market for initial public offerings in 2018 has been lost by Singapore despite being a major international financial hub.
 
Vietnam out performed Singapore - even though the former is not always thought about as the first preference stock exchange for launching of IPOs. This communist ruled market is in fact termed to be a frontier market by most of the major index providers which means that it is considered to be riskier market to invest in even compared to some of the emerging markets. Singapore however is considered to be a developed market.
 
However, according to experts, the fall of Singapore is not because of a rise of Vietnam. Singapore has been more affected by global developments because of the wealthy city-state's open economy and this year there were a number of factors that have restrained companies from launching their IPOs.
 
"In the second half of 2018, global trade wars, political tensions and volatile markets have inadvertently impacted economic sentiments, causing delays in the listing timeline of some IPO aspirants," Tay Hwee Ling, Deloitte Southeast Asia and Singapore's global International Financial Reporting Standards and offerings services leader, told the news channel CNBC. 
 
The bad performance of Singapore in terms of IPOs in the entire of 2018 followed a similar global trend because firms were dissuaded from launching IPOs primarily because of the uncertain economic and geopolitical environment globally. According to data from consultancy EY, for the entire year, there were 13 launches at the Singapore exchange which raised a total of $500 million which placed it in fourth position in Southeast Asia behind Vietnam, Thailand and Indonesia.
 
EY said that in contrast, just 5 IPOs launched in Vietnam raised $2.6 billion in 2018 even though the market was far behind the other South East Asian markets even two years ago. Implementation of a long-awaited privatization drive by the government helped Vietnam to attract the large IPO deals. 2018 also saw the largest ever IPO launch in the country which $1.35 billion was raised by real estate firm Vinhomes. This deal was also second largest for Southeast Asia in 2018.
 
A report from Baker McKenzie and Oxford Economics predicts that in the near term, Vietnam could be among the top markets for IPOs because of the plans of the government to sell more of its stake in more companies in the country. According to a projection earlier this month by the law and the consultancy firm, Vietnam would raise the largest amount of IPO funds in Southeast Asia till 2021.
 
Tham Tuck Seng, PwC Singapore's capital markets leader said that there could be a tough competition for new listings among the stock exchanges in South East Asia because of the rise of Vietnam as well as some other developing countries of the region. Tham said in a December report that such a situation would put further pressure on Singapore to be able to stand out in the crowd to attract large IPOs, 
 
(Source:www.cnbc.com)






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