Southeast Asia’s equity capital markets reached a grim milestone in 2024, as IPO activity plunged to its lowest in nearly a decade, reflecting the headwinds battering global markets: high interest rates, volatile geopolitics and subdued investor confidence.
But there are signs the region is poised for a pickup in IPOs in 2025, led by a renewed focus on regional exchanges, a surge in smaller, tech-driven share listings, and rising private equity interest. Southeast Asian tech companies that had previously eyed US IPOs are increasingly pivoting to local exchanges, amid rising private equity support and domestic reforms, said a regional capital market analyst.
While Southeast Asia’s leading tech companies gained global recognition by listing in the US after the pandemic, their smaller companies that followed them often found success hard to come by, encouraging startups in the region to consider listing locally.
“The reality is quite different. If we look at recent examples like Grab’s successful listing in the US, it has generated significant excitement in the market in Southeast Asia and globally. However, if a Southeast Asian company is not sizable enough, it may struggle to gain visibility,” said Tay Hwee Ling, lead capital markets expert at Deloitte Southeast Asia.
She noted that while companies often succeed in raising their first round of funds, they frequently face challenges later due to limited attention or trading volume. Tay predicts the trend of Southeast Asian companies rushing to the US to list is likely to slow.
This shift could give local exchanges more opportunities to provide platforms for businesses to raise capital in the technology sector and beyond. Regional exchanges like Bursa Malaysia, the Stock Exchange of Thailand (SET), and Indonesia’s IDX are positioning themselves as safer alternatives, offering companies greater predictability and access to domestic investors.
Malaysian used car trading platform Carsome, which had been looking at a US share flotation, now wants to list locally, according to a venture capitalist.
This trend could lift the region’s tepid IPO market. In its 2024 Southeast Asia Capital Market report, Deloitte reported a sharp downturn in the region’s IPO market for the first ten and a half months of 2024, with only 122 IPOs raising USD 3 billion, compared with 163 IPOs and $6 billion in 2023.
Overall, Malaysia accounted for 53% of the total IPO funding raised in Southeast Asia in 2024, followed by Thailand with 26% and Indonesia with 12%.
Indonesia, a bellwether for IPOs in the region, saw a 90% drop in capital raised in 2024, with funding sliding to USD 368 million from USD 3.6 billion in 2023. A general election in February 2024 and lingering economic uncertainties left companies in a holding pattern.
After Deloitte had compiled the data, the Indonesian unit of Malaysian home improvement chain Mr.DIY went public on Thursday. The IPO helped the company raise IDR 4.15 trillion (USD 257 million), but this was far from enough to make up the difference from 2023.
Thailand, Southeast Asia’s second largest equity market, also faltered. New regulations requiring three years of audited financial statements for IPO candidates slowed the pipeline, with funds raised slipping to USD 756 million, a 42% decline from USD 1.3 billion in 2023.
In Singapore, although there were only four IPOs, versus six the previous year, funds raised dropped only slightly to USD 34 million. Analysts also highlighted a renewed focus and interest in real estate investment trusts, which have traditionally been a strength of the Singapore stock market. The Philippines had a only three IPOs but raised USD 203 million, up strongly from USD 81 million in 2023.
While others struggled, Malaysia emerged as an outlier, turning in the best performance of any market in the region. Bursa Malaysia had its best showing in six years, hosting 46 IPOs and raising USD 1.5 billion as of October, more than half of Southeast Asia’s total proceeds. Malaysia had nine more IPOs after Deloitte’s report. The standout was 99 Speed Mart, a convenience store chain operator that pulled in USD 574 million, making it the region’s largest IPO of the year.
Analysts suggest Malaysia’s success stems from two key factors: domestic reforms and a deliberate pivot toward smaller, local IPOs. Additionally, Bursa Malaysia’s ACE Market, designed for small and medium enterprises, has become a magnet for tech and growth companies, with 39 listings this year alone.
This focus on smaller, sector-specific IPOs is becoming a defining trend across the region. In the absence of blockbuster listings, consumer products, industrial goods, and renewable energy emerged as 2024’s leading sectors, accounting for nearly 70% of all IPO activity.
By comparison, 2023’s top ten listings accounted for 60% of the funds raised. The trend in 2024 in pointed to smaller, more resilient listings—companies with proven track records in their local markets.
PwC said in its equity capital report that the market is expected to rebound in 2025, as the macroeconomic environment stabilizes. Predicted interest rate cuts in many regions are likely to fuel a surge in IPOs in Southeast Asia.
Private equity has also stepped into the breach, emerging as a stabilizing force for pre-IPO companies. According to a report by Golden Gate Ventures and INSEAD, a business school, private equity and venture capital funds are increasingly backing Southeast Asia’s tech startups, creating a pipeline of companies primed for public listings in the next few years.
The report estimates 700 exits, including IPOs and trade sales, between 2023 and 2025, driven by regional tech leaders and late-stage capital injections.
Tech, in particular, is expected to play a central role in Southeast Asia’s IPO rebound. The US-China decoupling has accelerated investment in digital infrastructure, artificial intelligence, and fintech across the region. Analysts also highlight the rise of AI-powered businesses and renewable energy startups as key drivers of future IPO activity. Southeast Asia is becoming a crucial node in the global tech ecosystem, and that is attracting investors in innovative local companies.
Malaysia is expected to continue to excel, with key incentives such as shorter IPO approval times, tax breaks, and expedited moves from the ACE market to the main market. Ivy Ng, head of Malaysia research at CIMB noted in a report on December 17 that Malaysia’s equity market remains positive, driven by a third consecutive year of strong earnings with growth expected at 8% by end of 2025.
“Potential plans to introduce programs to enhance shareholders return of listed companies, similar to the Value-Up programs in Japan and South Korea, could boost foreign investor interest in Malaysia,” Ng said.
Indonesia, whose political uncertainty is largely behind it, is poised for a recovery, particularly in energy and resource-related listings, with 66 companies in the pipeline, according to IDX. Thailand’s push for tech and health care IPOs, combined with regulatory reforms, could restore investor confidence in its equity market.
Meanwhile, US President-elect Donald Trump’s return to the White House will be a wild card for many markets, including that for IPOs. The revival of “America First” trade policies could upend Southeast Asia’s IPO ambitions. During Trump’s first term, trade barriers and geopolitical friction drove a wedge between China and the US, and analysts expect more of the same when he regains office.
Malaysian think tank MIDF said in its market outlook that volatility is expected to be a hallmark in 2025. At the start of 2024, concerns over global economic growth and inflation heightened instability, compounded by uncertainty about the US Federal Reserve’s future interest rate moves.
“While the situation has somewhat stabilized, the election of Donald Trump has reignited uncertainty. Additionally, geopolitical tensions and economic slowdowns in Europe and China continue to contribute to market fluctuations,” the report said.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.