The Listing Boom in Southeast Asia

Public markets are going through strange times. 

In recent months, there have been concerns around red-hot inflation hitting highs not seen in the last couple of decades as well as warnings from the likes of Michael Burry that a crash is impending. 

However, despite this, it is not wrong to say that overall public market numbers still reflect a risk-on sentiment for most institutional investors. Central banks and governments still seem to favour more stimulus, as can be gleaned from the recent G7 summit.  Amidst this low-interest rate environment, investors are pushed up the risk curve, and tend to chase yields where possible. 

Apart from the usual suspects of growth stocks, this has also boded well for emerging markets stocks, including those from Southeast Asia. 

Great performance from the likes of SEA and overall market sentiment gave rise to big names such as Grab announcing listing plans. 

However, that was only the beginning. This has given rise to a flurry of several other mature Southeast Asian companies in late stage talks to public in overseas markets.  

PropertyGuru, an online real estate firm, has been in the news with regards to a de-SPAC with Peter Thiel, valuing it at ~US$2.0 billion.

One Championship, one of Asia’s largest sports media companies, has mandated bankers to discuss potential US listing options. 

Despite the impact of COVID-19 on overall travel, online travel companies and Traveloka have both been in independent discussions around public options.

Lastly, and obviously not the least, now that the GoTo merger has been finalized, a dual-listing seems to only be a matter of time.

With all these announcements and news coming in, it seems like now seems to be the best time for desired listings for Southeast Asian technology companies. 

Several factors have contributed to this. Apart from the general positive market sentiment, there is also a ‘scarcity premium’ factor at play. Going back to the factor on chasing yield, Southeast Asian companies represent a great opportunity for foreign institutional investors to get exposure to a booming region. 

This was seen in the initial days of Chinese listings, and now seems to be the time for Southeast Asia. 

However, factors like sentiment and scarcity do little beyond resulting in short-term pops and gains. Ultimately, long-term fundamentals of these companies will determine their success home and abroad. 

Pleasingly, it seems that these companies understand this, and have demonstrated taking major strides towards establishing sustainable long-term leadership in their categories in Southeast Asia.