KUALA LUMPUR, July 29 (NNN-Bernama) — Companies in Southeast Asia raised a record US$4.9 billion (US$1=RM4.22) through initial public offerings (IPOs) in the first six months of 2021, based on Bloomberg’s latest equity capital markets data, with US$4.1 billion raised through additional and rights offerings.
The amount raised by these companies through the equity capital markets jumped 50 per cent compared to the same period in 2019, prior to the COVID-19 pandemic, Bloomberg said in a statement Thursday.
“By deal count, Indonesia led the region with 23 companies listing shares on the Indonesia Stock Exchange in the first half (H1) of 2021. Indonesia is on track for a record year, with its biggest listing in a decade, the US$1.5 billion IPO of Bukalapak.com launching in July 2021.
“By amount raised, Thailand topped the table, accounting for 57 per cent of the amount raised from offerings in Southeast Asia (SEA) at US$2.8 billion, fuelled by the listings of PTT Oil & Retail Business PCL and microfinance lender Ngern Tid Lor PCL. The Philippines was in the second spot with US$1.3 billion raised, followed by Indonesia’s US$503 million,” it said.
The data also showed that these newly-listed IPOs in SEA recorded an average return of 59 per cent on their first month of trading, of which, in comparison, the best performing index in SEA, the Straits Times Index, returned 11 per cent in H1 this year.
“Oil and gas, food and diversified financial services were the top three sectors that raised funds through IPOs, contributed mainly by the two big IPOs in Thailand and Monde Nissin Corp in Philippines. These three companies raised about US$1 billion each,” it said.
Bloomberg APAC head of global data Vatsan Sudersan said about one-third of companies declared that they will use part of the funds raised to repay debt or loans, a marked increase from less than 5.0 per cent of companies using their proceeds for refinancing in the same period last year and 19 per cent in 2019.
“We continue to see companies tapping into the debt markets to raise capital in this region. We have seen less bond defaults as government measures have helped businesses weather a liquidity crunch.
“Investors should monitor current restructured loans to see how much will be converted into banks’ non-performing loans or be written off, post-government support,” he said.
Investors should also continue to watch the debt-to-equity ratio of companies to gauge their ability to pay off or take on more debt, while in the medium term, investors should review the investment in companies’ capital expenditures and the impact of that in revenue growth to determine their sustainability, he added.
— NNN-BERNAMA