Vietnam has become Southeast Asia’s top grossing market for initial public offerings in 2018 with total proceeds of US$2.6 billion. Thailand ranked second with total proceeds of $2.5 billion and Indonesia was in the third place with $1.2 billion, while Singapore, who lost its crown to Vietnam, retreated to fourth position this year with total IPO value of just $500 million.
The rankings were based upon data from global consultant firm Ernst and Young (EY), which noted that Vietnam’s rise was attributed to large IPO deals in the country as its Government pushed ahead with equitization of big State-owned corporations.
Vietnam’s State Owned Enterprises (SOE’s) held five IPO’s and raised more than $821 million USD. They included Binh Son Refining and Petrochemical Corp JSC (BSR), PetroVietnam Oil Corp (PV Oil), PetroVietnam Power Corporation (PV Power), Viet Nam Rubber Group (VRG) and Viet Nam Southern Food Corp (Vinafood II).
The IPO of PetroVietnam Power was the biggest deal with proceeds of almost $300 million USD; followed by BSR with $245 million USD; and PetroVietnam Oil with $180 million USD. Viet Nam Rubber Group and Vinafood II each earned the Vietnamese Government over $40 million USD for their IPOs.
The biggest deal in Vietnam was not from a SOE, but from a private company – the $1.35 billion IPO by Vinhomes, a real estate arm of Vingroup. This is also the largest IPO ever held in Vietnam and was Southeast Asia’s second biggest deal in 2018.
The Vietnam market rise is among few performers that saw growth in IPO activities.
According to EY’s data, about 1,350 IPOs were carried out globally in 2018, down 21% year-on-year. But while the number of deals was down, the total proceeds rose 6% to $204.8 billion thanks to mega deals such as the $21.1 billion IPO by Japanese SoftBank, $7.5 billion IPO by China Tower and $5.4 billion IPO by China’s mobile phone company Xiaomi.
In Southeast Asia, besides Vietnam, only Indonesia has had a busy IPO market with yearly growth of 66% while the rest of the region, including major financial hub Singapore, witnessed declines. According to experts, global trade wars, political tensions and volatile markets in the second half of this year have had an adverse impact on businesses, causing some delays in their listing schedules.
In the next three years, with more State-owned enterprises being equitized, Vietnam is expected to remain at the top of Southeast Asia’s IPO league, according to a report from Baker McKenzie and Oxford Economics.
Projections for Southeast Asia IPO proceeds (billion USD)
Source: Baker McKenzie & Oxford Economics