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Vietnam recorded just one initial public offering (IPO) in the first half of this year, as the downward trend continued in the IPO market, according to Deloitte's Southeast Asia Mid-Year IPO Snapshot 2024.
DNSE Securities JSC was the sole listing in the country during the first half of 2024, successfully raising a respectable sum of $36.9 million. The company is the developer of Entrade X, a platform designed to offer a speedy trading experience with a simplified interface for stock trading.
That single listing surpassed the market performance for the whole of 2023, which saw three listings collectively raising approximately $7 million.
Vietnam has postponed the launch of its new stock trading system, potentially to September 2024. This system is designed to expedite the settlement of transactions and is part of broader efforts to upgrade the country's stock market and attract more foreign investors.
If successfully implemented, this initiative could enhance Vietnam's prospects of being reclassified from a 'frontier market' to an 'emerging market'. The current 'frontier market' status restricts many funds and family offices from investing in companies listed in the country.
The Southeast Asia IPO capital market saw just 67 IPOs in the first half of 2024, with $1.4 billion raised and an IPO market capitalisation of $5.8 billion, compared to the first half of 2023 with 85 IPOs, $3.4 billion in IPO proceeds, and IPO market capitalisation of $20.1 billion.
Tay Hwee Ling, Deloitte's Southeast Asia accounting and reporting assurance leader, said, "Despite a positive growth outlook and increasing foreign direct investment in Southeast Asia, the prolonged geopolitical instability and high interest rates environment have been the significant factors affecting the market conditions and investor sentiments in Southeast Asia, leading to a lukewarm record of IPOs in the first half of 2024. The ongoing inflation concerns and efforts to stabilise the global economy mean that the high interest rate environment could continue to persist in 2024."
"While Southeast Asia's IPO market may appear subdued in 2024, there is cautious optimism that conditions will improve beyond 2024. As investors and IPO candidates adapt to the new norm of higher interest rates and reduced liquidity, they are becoming more adept at navigating the complexities of geopolitical tensions and the global economic landscape," he said.
"Looking further ahead, the potential for interest rates to decrease could spur the return of REIT (real estate investment trusts) listings in the region. Additionally, AI and AI-associated businesses are still in the early seeding stages within the private domain. We anticipate a significant wave of AI IPOs tapping on the IPO capital markets in the coming years, bringing innovation and new opportunities to the market," Ling added.
DNSE lists on HSX with valuation at nearly $390 million
DNSE Securities went public on the Ho Chi Minh City Stock Exchange (HSX) with 330 million shares on July 1, and hit a company valuation of nearly VND10 trillion ($392.8 million).
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By Thanh Van
