Vietnam has smallest IPO funds in Southeast Asia

Thailand raised $3.6 billion in IPO funds while the figure in Vietnam was a mere US$71 million.

Vietnam witnessed 8 successful IPOs last year, down from 13 in the previous year, but the amount of funds raised more than quadrupled from $15.6 million to $71.4 million, according to the 2022 full-year report “Southeast Asia IPO Capital Market.”

In the first half of 2022, the Vietnamese capital market kicked off with 6 successful IPOs, raising $65 million, building on the vibrant market movements of the second half of 2021.

The slowing down of momentum in the second half of last year was attributable to global uncertainties surrounding inflation and the increasing likelihood of recession.

In Vietnam, the trend has been driven by escalating fuel prices, rising interest rates, tightening capital markets and recent financial scandals, according to the Deloitte report.

“The IPO market focus has shifted from real estate in 2021 to industrial products and consumer business in 2022. It is expected that consumer business will continue to play a key role, with highly anticipated upcoming listings from this sector,” said Bui Van Trinh, deputy leader of disruptive events advisory at Deloitte Vietnam.

According to Trinh, Vietnam’s regulatory bodies have launched several initiatives to promote the transparency of financial information. They have introduced regulations that encourage a transparent, efficient and respected listing process, and promote the adoption of International Financial Reporting Standards (IFRS).

“We hope that this will boost local and international investor confidence, and enhance the attractiveness and vibrancy of Vietnam’s capital market,” he said.

Vietnam’s economy is projected to grow by 6.5% this year, down from 8.02% last year. Slower growth stems from uncertainties in the global economic environment, and dependency on overseas partners for manufacturing activities, according to Deloitte.

“There is a strong pipeline of companies waiting to go public subject to better market conditions. Regulatory changes are expected to boost investor confidence and stabilize the economy in the longer run which will translate into a more active stock market,” said the accounting giant.

Last year capital markets across Southeast Asia produced 163 IPOs that raised $7.6 billion in funds.

Thailand had 42 IPOs, which raised $3.6 billion, the biggest amount in Southeast Asia, followed by Indonesia with 59 IPOs and $2.4 billion, Malaysia with 26 IPOs and $801 million, Singapore with 11 IPOs and $428 million, and the Philippines with 8 IPOs and $352 million.

In 2021, Southeast Asia saw 152 IPOs, which raised $13.3 billion in funds.

Last year, while the number of IPOs increased, the total funds raised decreased, which is indicative of a higher number of small listings in 2022, a year of global uncertainty in the economy and financial markets, with consecutive federal rate hikes launched to battle rising global inflation, as well as the Russia-Ukraine conflict contributing to a supply chain crunch and upward pressure on prices, according to the Deloitte report.