Many unfavorable conditions and the decline in the stock market have caused companies wanting to IPO to postpone their plans.
The latest report from Deloitte shows that Vietnam’s IPO market is the least active in Southeast Asia. As of mid-November, Vietnam had only three initial public offerings, raising $7 million.
These enterprises include Dong Duong Construction and Trading Joint Stock Company; Tu Hai Ha Nam Limited Liability Company; and Hoang Gia Production and Investment Joint Stock Company.
The low number of IPOs is mainly due to the tightening of the approval and listing process. At the same time, the net withdrawal of capital from foreign investors is higher due to global and local factors affecting market liquidity in 2023. According to Deloitte, these unfavorable conditions, along with the decline of the VN-Index since the first half of 2022, have forced companies wishing to IPO to delay their plans and wait for a more suitable time.
Mr. Bui Van Trinh, Assurance Services Leader, Deloitte Vietnam, said that although stock market indices have recovered near the end of 2023, they are still far from the peaks of 2021 and early 2022. However, investor confidence could be strengthened next year thanks to the Government's economic stimulus measures as well as its policy of upgrading the stock market.
In Southeast Asia as a whole, Deloitte recorded 153 IPOs and IPO market capitalization. While the number of deals was relatively stable, the total amount of capital raised hit an eight-year low. Companies raised about $5.5 billion, down from $7.6 billion from 163 deals in all of 2022.
Of these, businesses from Indonesia, Thailand, and Malaysia raised about $5.4 billion, accounting for 98% of the total capital raised. Indonesia was the most active market in the region with 77 deals worth $3.6 billion. This achievement helped Indonesia have the fourth strongest stock exchange globally as of mid-November, behind only China, the US, and the United Arab Emirates (UAE).
Currently, energy, resources & industrials and consumer are the most active sectors in the market this year.
Sharing more about the market outlook for 2024, Ms. Tay Hwee Ling, Head of IPO Services for Southeast Asia and Singapore, said that many exchanges are facing a new trend of local companies wanting to list on large overseas markets to access capital, investors, or secure the best valuation. Accordingly, for some companies, listing in the US is very attractive due to the large community of investors and higher liquidity in the US. Companies may also choose to list in other regions to better access their key target markets.
Duc Minh
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