Vietnam is now Southeast Asia's largest grossing market for initial public offerings in 2018. The country leaped ahead of Singapore as it raised $2.6 billion in the second half of 2018.
The international financial hub Singapore, classified as a developed market, was brought down by Vietnam from the top place. The communist country is not the usual top priority of stock investors and it is often considered to be less established and riskier market than other Asian countries.
Experts, however, claims that the fall of Singapore's IPO is not dependent on the rise of Vietnam. According to them, Singapore's is much more affected by global developments and there were global issues that might have affected the decisions of the companies as they hold back their IPOs in 2018.
Tay Hwee Ling, leader of the Deloitte Southeast Asia and Singapore's global International Financial Reporting Standards and offering services, said in an interview with the CNBC that in the second half of 2018, global trade wars, political tensions, and volatile markets have inadvertently impacted economic sentiments causing delays in the listings timeline of some IPO aspirants.
The drop in Singapore's performance followed the fall of IPO activities globally due to the doubts of the companies in their expansion plans caused by the uncertainty in economic and geopolitical outlook around the globe. EY consultancy's data showed that Singapore closed 13 deals raising $500 million after the year ends.
EY also reported that Vietnam gained the top spot this 2018 after its five IPOs raised $2.6 billion. Significant IPO deals became possible in the country after the Vietnamese government pushed ahead its privatization drive. The largest IPO share in the country is distributed by the real estate firm Vinhomes after raising $1.35 billion this 2018. It ranks second in the whole of Southeast Asia this 2018.
Baker McKenzie and Oxford Economics predicted that Vietnam will remain at the top of Southeast Asia's IPO league after the government's expected selling of its stake in more companies. The firm also projected that Vietnam will raise the largest amount of IPO funds in Southeast Asia at the end of 2021 followed by Singapore and Thailand.
Tham Tuck Seng, a leader at the PwC Singapore's capital markets, said that the rise of Vietnam and other Southeast Asian developing countries will intensify the competition for new listings among the region's exchanges. He added that Vietnam's lead will increase the pressure on Singapore to strive even further to stand out.
