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Southeast Asia IPO capital market 2020 Full Year Report

02

Brochure / report title goes here | Section title goes here

Southeast Asia IPO Market overview 03

Biggest IPOs of 2020 07

SEA IPO Market outlook 08

Country in focus: Thailand 10

Country in focus: Malaysia 13

Country in focus: Indonesia 15

Country in focus: Singapore 17

Evolution of REITs in Southeast Asia 21

03

Southeast Asia IPO capital market | Southeast Asia IPO Market overview

Southeast Asia IPO Market PerformanceCapital markets across Southeast Asia achieved market capitalisation of US$29.1 billion, having produced 114 initial public offerings (IPOs) which raised US$7.0 billion in funds.

Although the number of IPOs had decreased by 29% from 161 to 114 IPOs, the total IPO amount raised remained consistent at US$7 billion. In fact, total IPO market capitalisation in 2020 had increased by 16%, giving a strong signal to the potential influx of new exciting large-cap companies with higher valuations in the Southeast Asia IPO market.

Market overview

Year-on-year Summary

20 5

40 10

60 15

80 20

100 25

Num

ber o

f IPO

s

Fund

s ra

ised

/ M

arke

t Cap

(US$

bill

ions

)

120 30

140 35

160 40

180 45

200 50

– –2016 2017 2018 2019 2020

No. of IPOs 113 178 151 161 114

Funds raised 6 10 10 7 7

Market Cap 19 33 46 25 29

04


Number of IPOs Year-on-year

IPO Market Capitalisation Year-on-year

Market overview by country

Indonesia Malaysia Philippines Singapore Thailand Vietnam Total

2016 16 12 4 16 27 38 113

2017 37 13 4 20 46 58 178

2018 57 22 1 15 23 33 151

2019 55 30 4 11 34 27 161

2020 51 19 4 11 28 1 114


2016 4,348 942 3,911 3,228 4,497 1,704 18,630

2017 3,249 3,939 2,470 6,219 13,537 3,830 33,244

2018 5,998 683 763 2,168 5,355 31,103 46,070

2019 5,071 1,954 1,337 3,176 12,685 939 25,162

2020 2,484 2,900 3,045 2,835 17,590 285 29,139

IPO

Mar

ket C

ap (U

S$ m

illio

ns)

2,000

4,000

6,000

8,000

10,000

32,000

2016 2017 20192018 2020

05


IPO Funds Raised Year-on-year


2016 922 366 921 1,662 1,502 195 5,568

2017 1,024 2,219 473 3,492 2,912 304 10,424

2018 1,132 166 153 551 2,850 4,667 9,519

2019 1,052 447 407 2,263 2,996 172 7,337

2020 377 490 809 968 4,356 9 7,009

Key Highlights in SEAIn spite of the Covid-19 pandemic which affected the global economy in 2020, three of the six major Southeast Asian markets outperformed 2019 in terms of IPO funds raised. Most countries had at least one marquee listing that was the silver lining to an otherwise subdued year in the IPO market. Thailand continued to outperform its regional peers in terms of the amount of funds raised and the size of its companies’ market capitalisation.

Not only did Thailand raise the most funds in Southeast Asia, accounting for 62% of total funds raised across Southeast Asia in 2020, it also broke the US$3 billion mark for the first time since 2016 with total proceeds of US$4 billion. This represented a 45% increase over the previous year and with a strong pipeline for 2021, it does not seem to be letting up any time soon.

Singapore came in second despite fewer IPO transactions, contributing to 14% of all funds raised in the region. It also reinforced its stature as an attractive listing destination for foreign companies; 61% of IPO proceeds were raised by companies with foreign operations. The Singapore Exchange (“SGX”) also saw its first “tech unicorn” IPO with a US$1.3 billion valuation.

The Philippines outperformed itself with nearly double the amount of funds raised and IPO market capitalisation in 2020 as compared to 2019. It capped off an impressive year with the introduction of its very first REIT listing in the market.

While there were fewer listings in 2020, total IPO market capitalisation did jump by nearly 48% on the back of a listing by a large international home improvement chain, Mr DIY. The local Government also introduced new incentives for growth companies to list.

Indonesia topped the charts again with the highest number of IPO transactions in Southeast Asia, for the third year in a row. There was a total of 51 new IPOs, contributing to 45% of the total listings in the region. It also saw the first listing of growth stock under the Acceleration Board.

With the establishment of the Vietnam Stock Exchange as a parent company to the existing Hanoi and Ho Chi Minh City Stock Exchanges, it will streamline the management system and use of harmonised technologies, criteria for listing, reporting and disclosing information. The country is also poised for the quickest economic recovery, thanks to an effective Covid-19 response.

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500 1,000

1,500 2,000

2,500 3,000

3,500

4,000 4,500

5,000

Fund

s ra

ised

(US$

mill

ions

)

2016 2017 2018 2019 2020

06


Average market capitalisation per IPO in Southeast Asia

The above table illustrates all the factors, such as the volume of listings, volume of funds raised and total market capitalisation for comparison across the markets.

Thailand led all but one country in the number of IPOs in 2020, and also towered over the rest with the amount of funds that had been raised. Its average market capitalisation was also much larger than the Southeast Asian counterparts as it saw several successful IPOs from some of the country’s largest corporations.

Similarly, Philippines also welcomed several companies with large market capitalisations.

And while Indonesia saw a voluminous turnout, most listings were small and had low market capitalisation. This comes on the back the Indonesian’s Government efforts to encourage more growth companies to list on the country’s non-primary stock exchanges.

ID

MY

PH

SG

TH

VN

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900

- 10 20 30 40 50 60

Ave

rage

mar

ket c

ap p

er IP

O

No. of IPOs in 2020

Indonesia Malaysia Philippines Singapore Thailand Vietnam

Size of funds raised

Fewer listings; higher market cap

Fewer listings; lower market cap

More listings; higher market cap

More listings; lower market cap

07

Next 7 biggest IPOs of 2020 in Southeast Asia

#1 Central Retail Corporation Public Corporation Public Company LimitedTHAILAND

A family-owned business, with hundreds of malls, electronics, grocery and 24-hour convenience stores across the country. Over the years, the company has acquired several luxury shopping brands in Europe and is now looking to make inroads into the online sales market. Its initial public offering puts the firm amongst Thailand's largest public companies.

Date of listing: 20 February 2020 Funds raised: US$ 1,767,000,000 IPO Market cap.: US$ 8,004,000,000

#2 SCG Packaging Public Company Limited THAILAND

The business is focused on becoming a leader of total packaging solutions in the ASEAN region and has been expanding its food packaging business over the years. It is a subsidiary of the Siam Cement Group, which is the second-largest and oldest cement company in Thailand.

Date of listing: 22 October 2020 Funds raised: US$ 1,266,000,000 IPO Market cap.: US$ 4,774,000,000

PHILIPPINES

#3 Converge Information and Communications Technology Solutions, Inc.

A telecommunication service provider which operates fibre optic broadband networks, cable television and cable internet. It has a congressional franchise to construct, install, maintain and operate in the Philippine information and communications system for 25 years until 2034. The company holds 54% of the market share of fibre to homes in the country, and boasts over 900 thousand subscribes across 200 cities in the Luzon region (includes Metro Manila).

Date of listing: 26 October 2020 Funds raised: US$ 523,000,000 IPO Market cap.: US$ 2,330,000,000

Rank Country of Listing Company Date

of listingFunds raised

(US$ mil) IPO market cap (US$ mil) Industry

#4 ThailandSri Trang Gloves (Thailand)

Public Company Limited02-Jul-20 475 1,548 Consumer Business

#5 Malaysia MR D.I.Y. Group (M) Berhad 26-Oct-20 362 2,415 Consumer Business

#6 SingaporeNanofilm Technologies International Limited

30-Oct-20 345 1,250 Industrial Products

#7 Singapore United Hampshire US REIT 12-Mar-20 310 395 Real Estate

#8 ThailandKerry Express (Thailand) Public Company Limited

24-Dec-20 281 1,628 Consumer Business

#9 Philippines Areit, Inc. 13-Aug-20 255 543 Real Estate

#10 Singapore Elite Commercial REIT 06-Feb-20 169 291 Real Estate

Biggest IPOs of 2020

Southeast Asia IPO capital market | Biggest IPOs of 2020

08

Southeast Asia IPO capital market | SEA IPO Market Outlook

In comparison to:

Source: (1) World Bank – 2020 estimated forecast per January 2021 report (2) Asian Development Bank – Asian development outlook supplement December 2020 report (3) www.tradingeconomics.com – Australia GDP annual growth rate as at December 2020

Southeast Asia Economic ProspectsThe outbreak of COVID-19 has necessitated the implementation of stringent policy measures, setting off a global economic crisis of unprecedented magnitude. With the number of COVID-19 cases globally still increasing significantly in several regions, it remains to be seen whether the vaccine will tame the spread of the virus, and consequently its impact on the economy.

Of the six Southeast Asian countries in our report, Vietnam is the only one with a positive GDP full year forecast, albeit a sharp dip from 2019; there is been a tightening for the other SEA countries, with contractions in all five countries' forecast GDP growth.

SEA IPO Market Outlook

Indonesia: -2.2% (2019: 5.0%) (1)

Passing of OMNIBUS lawPrivatisation of State-Owned

Enterprises

Singapore: -6.2% (2019: 0.7%) (2)

Companies in the pipeline for SGXPositive impact to some sectors

amidst Covid-19

Thailand: -6.5% (2019: 2.4%) (1)

Strong pipeline amidst concernon macro environment mainly from a sharp decline in tourism industry

Vietnam: 2.8% (2019: 7.0%) (1)

Proactive Covid-19 measuresWas not as hard hit by the virusImproving regulatory environment

Malaysia: -5.8% (2019: 4.3%) (1)

Economy impacted by drawn out lockdownsTourism and manufacturing hit hardLow expectations for rebound

Philippines: -8.1% (2019: 6.0%) (1)

High economic costs of containing the virusSome optimism for a strong rebound in the coming months

China 2.0% (1)

(2019: 6.1%)

USA -3.6% (1)

(2019: 2.2%)

Europe -7.4% (1)

(2019: 1.3%)

Japan -5.3% (1)

(2019: 0.5%)

Hong Kong-5.5% (2)

(2019: -1.2%)

Australia-3.8% (3)

(2019: 1.6%)

09

Southeast Asia IPO capital market | SEA IPO Market Outlook

Volume of listings and funds raised per quarter in Southeast Asia

“Five out of ten of the largest IPOs in Southeast Asia took place in Q4 2020. This could be due to the fact that companies had merely temporarily paused their IPO plans as they ride out the Covid-19 pandemic. It lends a good momentum for a positive outlook for the start of 2021.”

Ms Tay Hwee Ling, Disruptive Events Advisory Leader, Deloitte Southeast Asia and Singapore

The year started strongly with the listing of Thailand’s Central Retail Corporation Public Company Limited in February, one of the largest IPO of the year. With talks of more IPOs in the pipeline, 2020 was shaping up to be a very fruitful year in the capital markets. Unfortunately, the virulent spread of Covid-19 across the globe in March quickly placed a damper on it and the subsequent efforts from all governments to contain the spread meant that all transactions screeched to a stop in April.

Half a year on, the capital markets have since seen a sharp V-shape recovery. Companies have begun resuming their IPO plans and some have successfully listed in late-2020. With more and more countries cautiously reopening and with the administering of vaccines globally, the outlook of 2021 remains to be seen.

500

1,000

1,500

2,000

2,500

3,000

3,500

0

2,495

104

1,119

3,291

Volume of funds raised

10

20

30

40

0

33 3534

12

Volume of listings

10

Southeast Asia IPO capital market | Country in Focus: Thailand

Thailand IPO Performance Year-on-year

“Thailand’s IPO market continues to show its growth potential as one of the stronger IPO markets in Southeast Asia. Largely driven by home-grown companies and fuelled by increasing investor interests in firms focused on consumer businesses, it continues to appeal strongly to investors and fund managers.”

Ms Wilasinee Krishnamra, Disruptive Events Advisory Leader, Deloitte Thailand

Thailand IPO Market PerformanceWhile setbacks from Covid-19 meant that Thailand could not match the record from previous year for number of listings, it did raise more funds and welcomed firms with larger market capitalisation in 2020.

The country saw only 28 listings in 2020, a decrease of 18% from prior year. Yet the total funds raised and total IPO market capitalisation increased by 45% and 39% respectively, as compared to 2019.

The total funds raised in the Thailand Stock Exchange amounted to over 62% of all funds raised in SEA in 2020, a large step ahead of its peers. The price-earning ratio of Mainboard listings averaged at about 32.5 times earnings.

Country in Focus: Thailand

Our Insights

2,000

23

2,850

12,685

17,590

5,355

34 28

4,000

6,000

8,000

10,000

US$

mill

ons

12,000

14,000

16,000

18,000

–2000 2019 2020

2,996

4,356

Number of IPO Amount raised Market cap.

11


Top 10 IPOs by Market Capitalisation in Thailand

# Company BoardListing

dateFunds raised

(US$ mil) IPO market cap (US$ mil)

Industry

1Central Retail Corporation Public Company Limited

SET 20-Feb-20 1,767 8,004 Consumer Business

2SCG Packaging Public Company Limited

SET 22-Oct-20 1,266 4,774 Industrial Products

3Sri Trang Gloves (Thailand) Public Company Limited

SET 02-Jul-20 475 1,548 Consumer Business

4Kerry Express (Thailand) Public Company Limited

SET 24-Dec-20 281 1,628 Consumer Business

5Saksiam Leasing Public Company Limited

SET 08-Dec-20 67 259 Financial Services

6Siamese Asset Public Company Limited

SET 25-Dec-20 28 204 Industrial Products

7NR Instant Produce Public Company Limited

SET 09-Oct-20 43 200 Consumer Business

8Earth Tech Environment Public Company Limited

Mai 18-Aug-20 50 188 Energy and Resources

9J.R.W. Utility Public Company Limited

SET 30-Nov-20 36 138 Technology, Media and

Telecommunications

10Khonburi Sugar Power Plant Infrastructure Fund

SET 24-Aug-20 90 90 Energy and Resources

Thailand dominated Southeast Asia’s initial public offering market in 2020, contributing more than 62% of total fund raised in the region. Despite the economic due to the outbreak of COVID-19, the listings of several home- grown companies in Thailand led the country to take the top spot in Southeast Asia’s IPO market. Central Retail Corporation Public Company Limited was the biggest IPO of the year in Southeast Asia, followed by another Thai company – SCG Packaging.

Thailand could see the momentum in IPO activity into the next year due to the easing of rules to open up Thai stock market to listings from foreign firms. The first pilot list is expected to see in 2021. In addition, The Stock Exchange of Thailand plans to launch a new stock market for start-ups and small and medium-sized enterprises (SMEs).

There are currently many companies in the pipeline to go public in next year led by PTT Oil and Retail Business, followed by Don Muang Tollway which operates elevated toll road and Ngern Tid Lor which is a non-bank that provides personal loan.

12


Percentage of IPO funds raised in Thailand in 2020, analysed by industry

The consumer business industry represents the largest fund raised through IPO in 2020 leading by Central Retail Corporation, the country’s largest retail department store operator and followed by Sri Trang Gloves and a parcel transporter, Kerry Express (Thailand). Both Sri Trang and Kerry Express’s business have been on an upward trend due to high demand for medical gloves, and a shift of consumer behavior from brick-and-mortar stores to online shopping.

Industrial Products was the second-largest industry by funds raised in 2020, led by SCG Packaging providing packaging services and solutions. Its business had inadvertently benefited from the COVID-19 pandemic due to increased demand for takeaway food containers and cardboard shipping boxes.

Energy and resources

Real estate

Financial services

Technology, media and telecommunications

Consumer business

Industrial products

13

Southeast Asia IPO capital market | Country in Focus: Malaysia

Malaysia IPO Market PerformanceThe long anticipated public offering of Mr D.I.Y Group (M) Berhad had raised over US$362 million in 2020, making it the largest IPO in the recent three years. With this in the bag, Bursa Malaysia mustered more funds raised compared to 2019, despite the subdued market activity.

Bursa Malaysia saw only 19 listings in 2020, which is nearly two-third of 2019 with a slight increase of 10% in funds raised over the previous year. Nevertheless, Malaysia IPO market capitalisation jumped by 48% in 2020.

Country in Focus: Malaysia

Malaysia IPO Performance Year-on-year

While there were fewer IPO transactions in 2020, it was the opposite for retail investors participation. In a low interest rate environment, investors have looked to the stock markets for greater yields. The average trading volume has increased by approximately 86% and 208% for Q2 and Q3 2020 as compared to the same quarter in 2019.

“The high trading volume with buying momentum should remain strong where investors are generally looking at stock specific rather than sectors, especially those related to technology and healthcare.”

Mr Wong Kar Choon, Disruptive Events Advisory Leader, Deloitte Malaysia

Our Insights

500

22166

1,954

2,900

683

30 19

1,000

1,500

2,000

2,500

US$

mill

ons

3,000

–2018 2019 2020

447490


14

2

7

10

Number of IPOs per Board in Malaysia

Southeast Asia IPO capital market | Country in Focus: Malaysia

Innature Berhad and Mr. D.I.Y. Group (M) Berhad both raised a total amount of US$389 million and recorded total market capitalisation of US$2.52 billion upon listing.

Mr. D.I.Y Group (M) Berhad is also ranked fifth out of the top 10 biggest IPO in Southeast Asia. Its share price has recorded an appreciation of 95% with total market capitalisation of US$4.88 billion as of 31 December 2020.

Mainboard

Amount raised of US$16 million and recorded total market capitalisation of US$76.75 million upon listing

Leap

Amount raised of US$85 million and recorded total market capitalisation of US$300.97 million upon listing

Ace

Tax deduction

Effective from the year of assessment 2020 to 2022, listings of eligible technology-based companies on the ACE and LEAP Market are eligible for a tax deduction of up to RM1.5 million on the following listing costs:

01. Fees to authorities02. Professional fees; and03. Underwriting, placement and brokerage

Economic Stimulus Package 2020

Listing fee waivers to encourage growth in fund-raising activities through listings on the Exchange.

Processing feeApplicable for IPO applications for listings on the ACE Market and the LEAP Market. The fee waiver will be granted for submission made within 12 months from 27 February 2020.

Initial listing and annual listing feesApplicable to listings of corporations on the ACE Market, LEAP Market and on the Main Market for corporations with estimated market capitalization of less than RM500 million for companies listed within 12 months from 27 February 2020

15

Indonesia IPO Market PerformanceFor the third year running, Indonesia led the Southeast Asia region again with the highest number of IPO transactions, although there were 51 listings compared to 55 listings in 2019, or a 7% decline.

However, the amount of funds raised was far less than the US$1.0 billion raised in 2019, a marked decrease of 64%. Total IPO market capitalisation has likewise declined by 51% as compared to 2019..

Country in Focus: Indonesia

Indonesia IPO Performance Year-on-year

The Indonesian government has taken steps in recent years to improve investment climate in Indonesia and encourage local companies to raise funds from the capital market. One way is by reducing corporate tax rates to bring them in line or even lower as compared to its regional peers. There are also ongoing efforts to push state-owned enterprises to publicly float their shares.

1,000

57

1,132

5,071

2,484

5,998

55 51

2,000

3,000

4,000

5,000

US$

mill

ons

6,000

–2018 2019 2020

1,052

377


Southeast Asia IPO capital market | Country in Focus: Indonesia

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Southeast Asia IPO capital market | Country in Focus: Indonesia

“The increase in the number of IPO transactions in Indonesia reflects the government’s active efforts to deepen its capital market, through inter alia, cutting down licensing and bureaucratic processes and offering tax incentives for listed companies. We expect the number of IPO transactions next year to remain strong.”

Mr Joe Lai, Disruptive Events Advisory Leader, Deloitte Indonesia

Our Insights

Main Board 2016 2017 2018 2019 2020

Number of IPO 3 7 17 10 8

Total Amount Raised (US$ million) 276 288 508 556 63

Total Market Cap. (US$ million) 2,229 890 3,226 2,368 1,007

Development Board 2016 2017 2018 2019 2020

Number of IPO 13 30 40 45 38

Total Amount Raised (US$ million) 646 736 624 496 302

Total Market Cap. (US$ million) 2,119 2,359 2,772 2,703 1,415

Acceleration Board 2016 2017 2018 2019 2020

Number of IPO N/A N/A N/A N/A 5

Total Amount Raised (US$ million) N/A N/A N/A N/A 12

Total Market Cap. (US$ million) N/A N/A N/A N/A 62

In terms of amounts raised, the sectors that dominated the IPO transactions are consistent with prior years, namely the consumer business, real estate and financial services, with the addition of the health care sector this year. The largest amount raised during the year was by PT Metro Healthcare Indonesia Tbk, a company in the healthcare sector.

In prior years, the Indonesia Stock Exchange introduced the Acceleration Board to encourage more small and medium enterprises to raise funds from the capital market. We saw the result of that through the five companies listed on the Acceleration Board this year.

We also saw several regulatory changes to the benefit of Indonesian companies. The recent omnibus law which reduced the licensing requirements and certain bureaucratic processes is expected to boost the economy. In addition to that, the corporate tax rate has been decreased from 25% in 2020 to 22% in 2021, and will reduce further to 20% in 2022. Listed companies can enjoy a further reduction of 3% if they meet certain criteria.

17

Singapore IPO Market PerformanceThe impact of Covid-19 and the subsequent government measures to contain it, dubbed the “Circuit Breaker” which lasted forapproximately 2 months between April and June 2020, led to a quieter year in the stock market for IPO transactions.

Country in Focus: Singapore

Total funds raised fell by 57%, from US$2.3 billion to US$1.0 billion and total IPO market capitalisation declined by 11%, from US$3.2 billion to US$2.8 billion.

However, there were a few bright spots. There were three companies with SGX Mainboard listings in 2020 compared to none in 2019. The three Mainboard IPOs raised US$458 million (S$620 million), which was the best showing in the last five years.

SGX also maintained its stronghold on being the undisputed leader in REITs and Property Trusts in the region. Two new REITs were listed on the bourse, which raised US$479 million (S$678 million) and boasted a total market capitalisation of US$686 million (S$969 million) upon listing. The 43 REITs and Property Trusts on SGX are valued at over S$100 billion, making it the largest REIT market in Asia (excluding Japan).

Singapore IPO Performance Year-on-year

500

15

551

3,1762,835

2,168

11 11

1,000

1,500

2,000

2,500

US$

mill

ons

3,000

3,500

–2018 2019 2020

2,263

968


Southeast Asia IPO capital market | Country in Focus: Singapore

18


18

# Company SGX Board Listing date Funds raised(US$ mil)

IPO market cap (US$ mil) Industry Country of

operations

1Resources Global Development Limited

Catalist 31-Jan-20 2 13Energy and Resources

Indonesia

2 Elite Commercial REITMainboard-REIT

06-Feb-20 169 291 Real EstateUnited Kingdom

3 Don Agro International Ltd Catalist 14-Feb-20 4 24Consumer Business

Russia

4 Memiontec Holdings Ltd Catalist 05-Mar-20 5 35Energy and Resources

Singapore

5 United Hampshire US REITMainboard-REIT

12-Mar-20 310 395 Real Estate United States

6Southern Alliance Mining Ltd

Catalist 26-Jun-20 14 88Energy and Resources

Malaysia

7Singapore Paincare Holdings Limited

Catalist 30-Jul-20 4 26Life Sciences and Healthcare

Singapore

8Nanofilm Technologies International Limited

Mainboard 30-Oct-20 345 1,250 Technology Singapore

9 Credit Bureau Asia Limited Mainboard 03-Dec-20 21 162 Financial Services

Singapore

10 Aedge Group Limited Catalist 11-Dec-20 2 15 Consumer Business

Singapore

11G.H.Y Culture & Media Holding Co., Limited

Mainboard 18-Dec-20 92 536 Consumer Business

China

2020 Total Count: 11 968 2,835

The Singapore stock market saw a flurry of activities right off the bat in Q1 2020, as it welcomed five new listings, of which two were REITs. The total monies raised in this quarter was a hefty US$490 million, which dwarfed the US$29 million of funds raised in Q1 2019. It was therefore no surprise that investors were gearing up for a big year in 2020.

Unfortunately, Covid-19 cast a pall over the market, with just two IPOs in the next six months raising US$18 million. However, the market picked up again in October as aspiring listing applicants came back in force, raising US$460 million in the last quarter, rivalling Q1 2020 results.

Among the heavyweights was the IPO of Nanofilm Technologies International Limited. With a market capitalisation of US$1.3 billion and a price-earning ratio of 41 times, some have called it the first “tech unicorn” in Singapore. The introduction of a new large-cap technology stock in an otherwise REIT-dominated SGX naturally pipped the interest of many investors, fuelling talks of more technology start-ups and growth stock in the future.

19 19

Percentage of IPO funds raised in Singapore in 2020, analysed by industry

The Real Estate industry continues to provide the larger part of funds raised through an IPO and SGX remains the regional hub for REITs and Property Trusts. The funds raised by the two REITs, United Hampshire US REIT and Elite Commercial REIT, amounted to US$479 million or 50% of all funds raised in 2020.

The technology industry saw a large jump in funds raised in 2020. Not surprisingly, it was thanks to the listing of Nanofilm Technologies International Limited, whose US$345 million IPO singlehandedly contributed to 36% of all funds raised in 2020.

“In a time of crisis, companies can find new growth by making fundamental changes to their business model. Sectors like healthcare and its suppliers have benefitted from the COVID-19 pandemic. Investors have also responded to the crisis and are adapting to the next normal – we have seen a significant increase in trading activities as the pandemic unfolded during the lockdowns. The use of technology for virtual IPO roadshows have allowed companies to break down barriers, gaining access to a wider pool of investors.”

Ms Tay Hwee Ling, Disruptive Events Advisory Leader, Deloitte Southeast Asia and Singapore

Our Insights

Consumer business

Energy and resources

Technology

Real estate


12%

2%

50%

36%

20


Key events and highlights in the Singapore capital market in 2020

Plucky PerformanceThe SGX performed relatively well despite the set backs from Covid-19, pulling through the year with three companies and two

REITs listing on the Mainboard, and six companies listing on the Catalist Board. The Singapore IPO capital market has raised more funds from companies listing on the Mainboard in 2020, than in the last five years.

Foreign PartnershipSGX regulatory arm (“SGX RegCo”) signed a Memorandum of Understanding with Nasdaq in July 2020 that reaffirms both

stock exchanges’ partnership in cooperating on regulatory matters, including a streamlined framework for issuers seeking a secondary listing on either exchange.

Resilience and StabilityUnder the Government mandate, Singapore was able to rein in the continued spread of Covid-19, which was initially proving difficult

to stop in a dense city-state. This eventually resulted in the gradual re-opening of the economy, as we continue to remain vigilant and cautious.

REITs LeaderWith another two REITs under its belt and a total market valuation of over S$100 million, SGX remains the undisputed leader in the Southeast

Asia region and a global hub for Asia (ex Japan) when it comes to attracting REITs to Singapore’s doorstep.

21

Evolution of REITs in Southeast AsiaOverview of REITs and Property Trusts in Southeast Asia

No REIT listing

59 REITs and property trusts. Almost all assets held are domestic

Welcomed its very first REIT, AREIT Inc., in 2020

REIT regulatory framework established in 2016.

11 REITs listed in total.

43 REITs and property trusts valued at over S$100 billion.Largest REIT market in Asia (ex Japan)

18 REITs, of which 4 are Shariah compliant, with market cap of about RM40.4 billion

Southeast Asia IPO capital market | Evolution of REITs in Southeast Asia

22


Percentage of funds raised in 2020, analysed by industry

REITs have also slowly moved away from non-traditional types of real estate assets.

The trend is likely to continue in the future, judging by the two new REITs in 2020, one of which is a U.S. grocery anchored and necessity-based retail and self-storage properties REIT.

At the start, almost all REITs were domestic, providing

investors the safe investments that they were familiar with.

Over time, investors’ appetite grew, and REITs started to comprise with foreign assets “closer to

home”. 19 REITs which started with fully local assets have now have diversified and acquired foreign assets.

Today, there are REITs with 100% offshore assets. 39 of Singapore’s 43 REITs own at least

some offshore assets globally.

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20162013 20172014 20182015 2019 2020so far

Multi-region Rest of SEA Rest of East Asia EuropeChina/Hong Kong U.S. South Asia Australia/NZ

Local and foreign - Singapore and multi-regionLocal only - Singapore

2 2 2 2

2

1

1

1

1

1

1

1

1

1

1

1 1 1 1

1 1

1 1 3

1 1

1

1

14 3

1

3

1

4

1 1

Foreign only:

Fully local-based assets

Emergence of pure foreign assets 'closer to home' in Asia

Shift towards Europe and U.S. in recent years

Hospitality17%

Commercial17%

Industrial18%

Diversified13%

Non-traditional

11%

Retail24%

Data centres2%

Others4%

Healthcare5%

Non-traditional assets

23

Diversity of Assets in Malaysia

First Shariah compliant REIT (i-REIT) in the world, Al-Aqar REIT was launched in June 2006 by the Johor Corporation. Started with 6 hospital assets, the number of assets has since grew to 23 with total value of RM1.57b.

First restructuring of conventional REIT, Axis REIT which converted into i-REIT in 2008, is the world’s first Islamic REIT with industrial and office properties.

While conventional REIT and i-REIT are fundamentally the same, the income of i-REIT:

• Must be from Shariah permissible activities; or

• In case of mixed activities, must adhere to 20% benchmark as determined by the Shariah Advisory Council of Securities Commission of Malaysia

Shariah committee or advisor must be appointed to advise the fund manager on Shariah compliancy matters.

i-REIT has created the opportunity for Muslim investors and institutions who seek to invest in investments that naturally fit with the Islamic finance principles.

ServicesDiversified

25%

75%

Hospitality

Industrial and warehouse

Diversified

Retail and office

7% 14%

7%

72%

Conventional REITI-REIT

22%

78%


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“COVID has made companies revaluate their business and growth forecast; and companies are looking into windows of opportunity to raise funds from stock markets to support their growth and stay resilient in this challenging climate. Although we are not out of the woods yet, the listing markets in Southeast Asia are still dynamic and attractive to investors.”Ms Tay Hwee Ling, Disruptive Events Advisory Leader, Deloitte Southeast Asia and Singapore

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Southeast Asia IPO capital market | Contact us

Contact usTo find out more, please contact the respective DEA Country Leaders:

Southeast Asia and SingaporeTay Hwee LingLeader, Disruptive Events Assurance [email protected]+65 6216 3258

IndonesiaJoe [email protected]+62 21 5081 8009

MalaysiaWong Kar Choon [email protected]+60 3 7610 8820

MyanmarCho [email protected]+95 96 7980 6766

PhilippinesBaltazar Wilfredo [email protected]+63 2 581 9000 ext 011

ThailandKrishnamra Wilasinee [email protected]+66 2034 0149

VietnamNam Pham [email protected]+84 24 710 50599

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