Vietnam leaped to the top of Southeast Asia’s initial public offering (IPO) ranking with five IPOs raising US$2.6 billion, CNBC reported.
Data: Ernst and Young (EY). Graphic: Hai Yen.
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With the Vietnamese government expected to sell its stake in more companies, the country could very well remain at the top of Southeast Asia’s IPO league, according to a report from Baker McKenzie and Oxford Economics.
The law firm and the consultancy predicted earlier this month that the frontier economy would raise the largest amount of IPO funds in Southeast Asia through 2021, with Singapore and Thailand close behind.
The rise of Vietnam — and other developing countries in Southeast Asia — could intensify competition for new listings among the region’s exchanges, said Tham Tuck Seng, PwC Singapore’s capital markets leader.
Meanwhile, Singapore, which has been the center of capital fundraising in Southeast Asia for many years, finished the year with 13 deals that raised about US$500 million – the fourth highest IPO proceeds in the region behind Vietnam, Thailand, and Indonesia.
Disbursement of FDI projects in Vietnam in 2018 jumped to a record high of US$19.1 billion, representing an increase of 9.1% year-on-year despite the ongoing trade tensions between the United States and China.
The future looks promising for Vietnam, as a number of fund managers and experts have said China-based companies may shift production to Vietnam to avoid tariffs.
So far, foreign investors have committed to pour over US$340.1 billion in Vietnam, with South Korea taking the lead with US$62.5 billion or 18.3% of the total, followed by Japan and Singapore.
Vietnam's effort to raise funds from the public-sector reforms is expected to triple in 2018 - 2020 compared to levels seen in the 2011 - 2017 period, according to Saigon Securities Inc (SSI), the largest brokerage house in the country.
Specifically, the total proceeds from IPOs and the share sales of SOEs in the next two years are expected to reach US$26.3 billion, 2.75 times higher than the sum raised for the whole period between 2011 and 2017.
Of the total, the value of IPOs will reach US$9.7 billion, while the total amount of divestment could hit US$16.6 billion.
"Vietnam could end up being the only country in the world that embarks on a new wave of SOE reform in 2018 - 2020, placing large and profitable SOEs on public offer," stated SSI.
