Deloitte: More IPOs in 2022

The number is returning to pre-Covid-19 level, driven by cornerstone investors and an abundance of uninvested capital 

by NUR HANANI AZMAN / pic MUHD AMIN NAHARUL

DELOITTE Touche Tohmatsu Ltd is optimistic more companies will be listed on Bursa Malaysia in 2022 as the country’s economy recovers from the Covid-19 pandemic’s impact. 

Deloitte Malaysia disruptive events advisory leader Wong Kar Choon said that the country saw the number of IPOs going back to pre-Covid levels, driven by corner-stone investors, coupled with an abundance of uninvested capital. 

“With rising vaccination rates in the country, there is a growing number of technology-based start-ups and companies looking to increase their presence and capacity to tap the capital markets. 

“From what we see in the pipeline that we have, we will probably have some major IPOs which are pending from the regulator,” he told reporters during Deloitte Media Conference: South-East Asia (SEA) 2021 IPO Market Performance and Outlook yesterday. 

Bursa Malaysia, in 2019, registered 30 new listings but the number fell to 19 in 2020. 

Malaysia’s IPO market has remained vibrant with 24 IPO listings as of Nov 15, 2021. Proceeds raised in 2021 decreased to US$180 million (RM761.4 million) from US$490 million in 2020. 

The introduction of the Third Capital Market Masterplan by Securities Commission Malaysia, digitalisation of operations, and overall recovery of the economy from Covid-19, has made Deloitte optimistic that more companies will be listed in 2022. 

“As we keep an eye on the macro-economic impact of fiscal and regulatory policies, including sustainability reporting on global markets, we expect 2022 to be a busy year,” Wong added. 

He said that there is a growing number of technology-based start-ups that are looking to tap the capital market especially via special purpose acquisition companies (SPACs) in the US. 

“Retail investor interest is expected to remain strong towards the end of 2021, even though average trading volumes have decreased from the peak in 2020,” Wong said. 

Data by Deloitte as of Nov 15, 2021, showed that companies in SEA raised a record of US$9.8 billion from 121 IPOs this year, outperforming the full calendar year 2020. 

The momentum in IPO activity continues to grow even as the region is still battling the Covid-19 pandemic, with the number of IPOs up by 6%, total funds raised up by 39% and the total IPO market capitalisation growing by 24% compared to 2020. 

This translates to a US$2.8 billion increase in total IPO proceeds and increase in market capitalisation to US$36.1 billion in 2021. 

Deloitte SEA and Singapore disruptive events advisory leader, Tay Hwee Ling, said there is still a pipeline of listings to come to market this year and looks forward to SEA crossing the US$10 billion mark, and thus surpass the total funds raised in each of the last five years. 

She said that all eyes are on the region now, with abundant liquidity evident in the numerous blockbuster listings in SEA, the buzz around SPACs and the potential of new economy companies yet to reach its peak. 

“Amidst the volatility in the capital markets, companies have learnt to be resilient with pandemic-related challenges. 

“With the growth potential and untapped opportunities in SEA, I am bullish about what the region’s capital markets can achieve in 2022 with the diverse sources of investment capital and growing interest by sovereign wealth funds in Asian businesses,” said Tay.