Malaysia Records Highest IPO Proceeds Among ASEAN Members In Q1 2022 -- EY

KUALA LUMPUR, April 13 (Bernama) -- Malaysia led other ASEAN countries in initial public offering (IPO) proceeds during the first quarter (Q1) of 2022 as exchanges in the bloc recorded a year-on-year (y-o-y) decline of 57 per cent in total proceeds for the period, according to Ernst & Young (EY). The consultancy firm said ASEAN’s exchanges saw a higher number of IPOs -- 29 IPOs in Q1 2022 versus 22 a year earlier -- but proceeds fell to US$1 billion (US$1 = RM4.23) from US$2.4 billion previously. “During this quarter, the Indonesia Stock Exchange (IDX) was most active by deal numbers (12 IPOs raising US$219 million), while Malaysia’s exchanges led by proceeds (US$362 million via five IPOs),” it said in a statement Wednesday. EY attributed the marked decline in ASEAN’s IPO proceeds to the lack of a mega IPO being posted in Q1 2022, compared to one mega IPO a year ago. Max Loh, Ernst & Young LLP’s Singapore and Brunei managing partner and EY ASEAN IPO leader, said geopolitical tensions, the ongoing COVID-19 situation, supply chain woes, tightening of monetary policy and escalating costs were a few factors weighing down economic and IPO activity in ASEAN. "The IPO market remains receptive to quality high-growth companies, but volatility, uncertainty and valuation expectations will need to be tempered before a resurgence in IPO activity can happen,” he said. Meanwhile, the global IPO market also witnessed a weaker performance in Q1 2022, with 321 deals raising US$54.4 billion in proceeds -- a decrease of 37 per cent and 51 per cent y-o-y, respectively. In contrast, the Asia-Pacific region surpassed its Q1 2021 IPO proceeds performance -- when it raised the highest Q1 proceeds in 21 years -- by recording 188 IPOs raising US$42.7 billion (19 per cent higher proceeds) in the quarter under review. The region accounted for 78 per cent of global IPO proceeds due to the listing of four mega IPOs. EY global IPO leader Paul Go said a decrease in IPO activity was not unexpected when compared with Q1 2021 as the latter was the most active quarter in the last 21 years. "However, the market shock from geopolitical tensions and other economic concerns in the second half of the quarter created volatility and impacted the capital markets,” he said. Go said the global IPO market would remain volatile in Q2 2022 amid many uncertainties, with a backlog of IPO candidates, and pipelines would continue to build up. “With the prevailing headwinds arising from geopolitical tensions and conflicts, inflation and interest rate hikes, it will be imperative for IPO-bound companies to take a fresh look at how these challenges will affect their markets, customers and suppliers to their business,” he added. -- BERNAMA