Unlocking Public Markets: Essential Considerations for SE Asia’s IPO Hopefuls

HKEX is the most popular destination for privately-held Southeast Asian companies looking to go public on a global bourse, according to the report ‘Unlocking Public Markets: Essential Considerations for SE Asia’s IPO Hopefuls’ published by DealStreetAsia and HKEX. 

Between 2014 and 2023, 83 of the 163 Southeast Asian companies that went public chose HKEX as their listing destination, followed by 18 (excluding SPACs) choosing NASDAQ, 15 listing at the Singapore Exchange (SGX) and 13 at the Australian Securities Exchange (ASX). The London Stock Exchange (LSE) ranked fifth with 10 listings.

The extensive research in the report underscores Hong Kong’s role as a key financial hub connecting East and West, and comes at a time when a rich range of more than 200 late-stage startups are emerging in Southeast Asia as potential listing candidates. 

Late-stage funding rounds in Southeast Asia have attracted more than $42 billion in private capital investments in the last five years, accounting for 66% of equity investments.

Key highlights from the report include:

• In the last two decades, 256 Southeast Asian companies listed on foreign stock exchanges, according to Dealogic data. Nearly two-thirds of these listings happened in the last ten years.
  
• Southeast Asia’s startup ecosystem has been maturing rapidly over the past few years, More than 200 companies across Southeast Asia qualify as late-stage startups, based on private capital data from the past five years.
• HKEX has made major reforms to its listings rules over the years and the share of new economy sectors such as IT and healthcare in the market capitalisation of HKEX has increased from 16% to 30% since 2017.
• HKEX has established itself as a leading hub for biotechnology fundraising, drawing a significant number of pre-revenue biotech companies. HKEX is the largest biotechnology fundraising hub in Asia and the second-largest globally, trailing only the NASDAQ.
• Hong Kong is poised to further benefit from measures announced by the China Securities Regulatory Commission’s (CSRC) which aim to align mainland exchanges with international practices and strengthen financial integration with Hong Kong.
• Southeast Asian companies stand to gain from reforms carried out by HKEX to address global liquidity challenges and to support innovative technology firms. Hong Kong’s strategic location serves as a crucial bridge between China and the world, offering unparalleled access to capital within Asian time zones.

The report also serves as a handbook for companies to navigate the unpredictability of the public market after their listing—How to manage lock-up period expirations? What are the strategies to prevent price volatility? How to establish strong investor relations and manage expectations? And how to ensure transparency through timely company reports?

Read the ‘Unlocking Public Markets: Essential Considerations for SE Asia’s IPO Hopefuls’ for more insights.