The future of the initial public offering (IPO) market in the Southeast Asian region comes with expected interest rate cuts alongside easing inflation may create a more favourable environment for IPOs in the years ahead, according to Deloitte.
"Southeast Asia’s strong consumer base, growing middle class, and strategic importance in sectors like real estate, healthcare, and renewable energy remain attractive to investors," says Hwee Ling Tay, accounting & reporting assurance leader at Deloitte Southeast Asia. "As foreign direct investment continues to flow into the region, 2025 is poised to be a year of renewed IPO activity across Southeast Asia."
For the first 10.5 months of 2024, the IPO capital markets in the region saw a count of 122 IPOs, raising approximately US$3.0 billion. While the number of IPOs remains healthy, Deloitte says the total capital raised has been the lowest in nine years, with a decline from the US$5.8 billion raised across 163 IPOs in 2023.
Southeast Asia also recorded a decline in IPO activity compared to the previous year, largely due to a lack of blockbuster listings. In 2024, only one IPO raised over US$500 million, in contrast to four such listings in 2023.
Despite global economic uncertainty accentuated by significant political shifts, which has created challenges for capital markets worldwide, Malaysia has stood out as a bright spot in Southeast Asia. It leads the region in all three key metrics: number of IPOs, total amount IPO funds raised, and IPO market capitalisation.
In terms of industries, Consumer and Energy & Resources are the top two dominating the region, accounting for 52% of the total number of IPOs and 64% of the total IPO funds raised.
Consumer industry
The Consumer industry in Southeast Asia is undergoing significant transformation due to a shift in consumer behaviour, which has led to heightened competition across local, regional, and global players. This change is driven by the region’s growing GDP, which has led to an expanding and increasingly affluent middle-class with greater spending power. As income levels rise, these consumers are in a better position to make more discerning choices, opt for premium products, and seek novel experiences.
Energy & Resources industry
The Energy & Resources industry, specifically the renewable energy sector, continues to be a focal point for Southeast Asia as the region grapples with the trilemma of ensuring energy security, equity, and environmental sustainability as it transitions towards more sustainable resources while balancing the need to meet rising energy demands.
Tay notes that Southeast Asia’s IPO market encountered significant regional challenges in 2024, including currency fluctuations, regulatory differences across markets, and geopolitical tensions, which affected trade and investment.
"High interest rates across ASEAN economies further constrained corporate borrowing, dampening IPO activity as companies opted to delay public listings."
Additionally, Tay says market volatility among major trade partners impacted investor confidence, while varied regulatory requirements across Southeast Asian countries created complexities for companies seeking cross-border listings.
"Companies seeking to list overseas have to consider markets that represent a core growth segment for their business, where investors can better understand and evaluate their business model, and where many comparable companies are listed. They should also consider which market has sector-specific analyst expertise to attract investors within their sector."
