Equity capital market activity in South-East Asia is picking up speed after a quiet year, with deals being seen from Thailand to Singapore and Indonesia.
Thai Airways International last week announced a rights issue of up to Bt44bn (US$1.27bn), taking the flag carrier closer to the end of its restructuring. Singapore’s Keppel DC REIT plans to start a S$301m (US$222m) preferential offering on December 2, after raising S$700m from a private placement as part of an equity raise of S$1.09bn to fund the acquisition of two data centres.
In Indonesia, Daya Intiguna Yasa, a sister company of Malaysia-listed home improvement retailer Mr DIY, is planning an IPO of up to Rp4.71trn (US$297m) in December, marking the largest listing in the country in more than a year.
In Malaysia, TMK Chemical last week opened the books for a M$385m (US$86m) domestic float, adding strength to a relatively active IPO market in the region, while Philippine fuel retailer Top Line Business Development started taking orders for an IPO of up to Ps2.87bn (US$50m).
The regional fundraising spree is mainly being driven by the US Federal Reserve's interest rate cuts, investors switching from other emerging markets and post-election dealmaking in the region, according to bankers.
“ASEAN markets have seen a good pick-up in activity since the US cut interest rates in September,” said one banker. “Asian currencies become stronger as the US dollar dips, encouraging investment in South-East Asian assets.”
Another banker said: “With India equities becoming more expensive, investors are looking for alternatives and we are seeing some rotational buying in emerging markets.”
Tay Hwee Ling, accounting and reporting assurance leader at Deloitte Southeast Asia, said 2025 is poised to be a year of renewed IPO activity across the region as foreign direct investment continues to flow in.
Indonesian run
These catalysts are particularly important for Indonesian issuers, whose fundraising plans were delayed by the country's general and presidential elections in February and regional elections in November. They are now rushing to launch deals after former general Prabowo Subianto was sworn in as president in October.
Apart from Daya Intiguna Yasa, coal miner Adaro Andalan Indonesia has launched a Rp4.59trn IPO with the listing expected on December 5 and Summarecon Investment Property in October pre-marketed a float of up to US$300m.
“We expect the more stable and inclusive political environment under the new Prabowo administration to be conducive for business and economic growth,” Soh Chih Kai, head of ASEAN equities at Lion Global Investors, said in a research report.
“Additionally, fundamental improvements in the commodity cycle could create a more resilient rupiah, attracting foreign investors back into Indonesia,” he said.
Some bigger Indonesian IPOs, including Pertamina Hulu Energi (US$1.5bn) and Pupuk Kalimantan Timur (US$500m–$1bn), are expected to come next year.
Thailand is a similar story. Bankers are hoping the fiscal stimulus programme of the new government will help boost the economy and set a positive backdrop for sizable listings such as SCG Chemicals (US$2bn–$3bn), Big C Retail (US$1bn) and CPF Global Food (US$1bn).
Bright spot
Malaysia, which has been a bright spot for IPOs in South-East Asia this year, is expected to see some big listings in 2025, including Sunway Healthcare Group (US$800m) and MMC Port (US$1.5bn).
IPOs have raised a combined US$1.5bn so far this year, the country's highest total in six years, with convenience store operator 99 Speed Mart Retail’s M$2.36bn float the biggest.
“Malaysia’s IPO market has demonstrated strong performance, bolstered by positive economic indicators, political stability and supported by active investor participation, especially from foreign investors,” said Wong Kar Choon, transactions accounting support partner at Deloitte Malaysia.
“With the heightened interest in IPOs by both companies and investors, as well as the impressive valuations being achieved in Malaysia, there is huge potential for Bursa Malaysia to become an attractive listing destination for regional companies,” he said.