Vietnam's IPO market has slowed down in 2023

The low number of IPOs in Vietnam was driven mainly by the tightened listing approval process and higher net-withdrawal from foreign investors due to global and local factors affecting market liquidity. These unfavourable conditions, coupled with Vietnam’s falling VN-index performance since the first half of 2022, resulted in IPO aspirants delaying their listing plans to instead wait for the right moment.

“Although Vietnam’s stock indexes have recovered towards the end of this year, it is still far from the 2021 and early 2022 peak. Nevertheless, the government has introduced several measures to stimulate the economy, along with initiatives to improve the ratings of the domestic stock market to boost investor confidence,” said Bui Van Trinh, assurance leader of Deloitte Vietnam.

Despite the slowdown in Vietnam, the IPO capital markets in Southeast Asia saw a healthy count of 153 listings over the same period. However, despite the healthy number, the amount raised from was the lowest in eight years.

As of November 15, companies in Southeast Asia had raised approximately $5.5 billion from this year’s IPO listings, down from $7.6 billion from 163 IPOs in the full year of 2022.

According to Deloitte, Southeast Asian companies are thriving and have the ability to go beyond their shores for cross-border IPOs. This is driven by expectations of favourable valuations, enhanced liquidity, industry comparability, and investor familiarity with certain sectors. Correspondingly, stock exchanges across the globe are paying more attention to Southeast Asian companies and are establishing new initiatives or revamping existing ones to improve their appeal as gateways to entice these high-growth businesses.

There is an observable trend of an increasing number of companies listing on the secondary boards of Southeast Asian bourses. Listing on the junior boards of the stock exchanges, which cater to high-growth small- and medium-sized enterprises (SMEs), may be seen as a springboard to the Main Board for some IPO aspirants. The listed-company status may propel them towards expansion and further fundraising.

There are many SMEs in the region with good growth potential, and a good financial ecosystem can provide these companies with the right environment to thrive and maximise this potential.

On the outlook through to 2024, Tay Hwee Ling, disruptive events advisory leader of Deloitte Southeast Asia and Singapore commented, “Amidst this challenging macroeconomic environment, many stock exchanges are dealing with the trend of Southeast Asian companies looking to list on large overseas markets to access more capital and investors, or where they perceive they can secure the best valuations. For quite a few companies, listing in the US is attractive due to the deeper pool of investors and liquidity.”

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