KUALA LUMPUR: Malaysia ranked third for the most active initial public offering (IPO) in Southeast Asia's first quarter (Q1) of 2023.
According to EY Global IPO Trends Q1 2023 report by Ernst and Young (EY), Malaysia managed to get 10 IPOs in Q1 2023, raising US$238 million in Q1 of 2023.
EY named Indonesia the most active in Q1 2023 with 30 IPOs, raising US$828 million, followed by Thailand with 10 IPOs with US$322 million raised.
Singapore stood fourth after Malaysia, with only 1 IPO that raised US$15 million.
As for Southeast Asia, EY said there are 51 deals for Q1, raising US$1.4 billion in proceeds, indicating an increase compared to last year's Q1, which registered 29 IPOs with US$1 billion raised.
The report said that globally, 299 IPOs raised US$21.5 billion, an eight per cent decrease in IPO volume and a 61 per cent decrease in proceeds year-over-year (YoY), respectively, for Q1 of 2023.
EY report said Q1 was another down period amid interest rate rises, a lukewarm stock market, entrenched inflation and unexpected global banking industry turbulence.
"Despite this ongoing uncertainty around the economic and geopolitical environment, the IPO pipeline continues to build, and hope remains for a turnaround later this year," it said.
EY mentioned that Asia-Pacific was listed as the most encouraging IPO deal within Q1, where it gathered 59 per cent of global IPO deals.
Nonetheless, EY pointed out that activity in the region has decreased 6 per cent by number and dropped 70 per cent by proceeds for YoY, registering only 175 deals that raised US$12.7 billion in proceeds for the quarter.
EY also said the Mainland China market seemed quieter than usual despite the lift-off of the pandemic control measures, but the country is set to be healthy, which accounted for more than 40 per cent of all global IPO proceeds.
EY's global IPO leader said the IPO window is brief, and funding conditions are becoming tougher, with investors prioritizing value over growth during persistent macroeconomic and geopolitical uncertainty.
"IPO-bound companies need to focus on building sustainable businesses with strong fundamentals to be well-positioned in a volatile environment and meet the challenges and opportunities of going public," he said.
EY said businesses would need to navigate the high-cost and reduced liquidity environment for a little longer.
Once there is evidence of a more stable market with higher certainty, investor confidence should return, and prominent companies that had postponed IPO plans may restart them, albeit at more modest valuations.