When it comes to the technology race in Southeast Asia, Singapore is considered a given winner; but for the past two years, Thailand’s IPO Market has been surpassing its fellow ASEAN country. In 2020, the fundraising scene in Thailand accumulated $3.94 billion USD and had 23 impressive initial public offerings to report, even amid COVID-19 based economy stagnation.
The Deloitte report
The prestigious auditing and consulting firm Deloitte has released its survey on economic stimulation in Southeast Asia. Thailand is making enormous strides in development garnering it 60% of the total fundraising that occurred, bucking the Southeast Asia VC trends in 2020.
The report is significant because Thailand is a tourism-based economy and was badly hit by the endless travel restrictions amid COVID protocols this year. However, the IPO fundraising by the kingdom has far surpassed the region’s base potential.
Top tech startups are thriving in Thailand’s market
The ratio of IPO fundraising is significantly higher by Thailand than in the entire region combined. Thailand’s 23 IPOs have raised more than half of the total stock market launches revenues in the region, while all the other Southeast Asian countries and their 77 IPOs made up the rest.
Largest IPO in the history of Thailand
The reason for the astounding increase in revenue from stock market launches in Thailand was the flotation of Central Retail Corporation’s (CRC) IPO. CRC is a highly regarded company that has expanded rapidly in Asia and Europe. The IPO for CRC was launched in the early months before the pandemic took hold and gained $2.48 billion in funds, making it the highest IPO fundraising moment in the history of Thailand.
This single corporation also accounts for more than 50% of the funds that make up Thailand’s total. Since the IPO for CRC launched in 2020, it stimulated locally grown businesses and encouraged them to strive for higher initial public offerings. The CRC head start has resulted in a belief in the growth potential for the country and given it more confidence in its startup ecosystem.
Thailand had looked likely to struggle economically since COVID-19 travel restrictions came into force globally. As Thailand relies heavily on the travel and tourism-based sector, with some 4.5 million people employed in this industry, the IMF expected a 7.1% drop in its economy this year. After the Philippines, Thailand was expecting to have the second-worst economic contraction in Southeast Asia. Even though its economy has suffered significantly, the country has regained its strength in the IT sector and continued with its digital development.
The disruptive events advisory leader at Deloitte Thailand, Wilasinee Krishnamra, had high praise for startups in the country saying; “the listings of several homegrown companies in Thailand this year appealed ‘strongly’ to investors and fund managers.”
Promising future ahead
Thailand’s momentum in IPO fundraising this year promises a bright future. Krishnamara predicts, “One factor likely to drive more IPO activity is plans to ease rules to attract more listings by foreign companies”, she explained.
The Stock Exchange of Thailand has announced its interest in launching a separate stock exchange for SMEs and startups. The move indicates a strong effort on the country’s part to mark its territory in the SME investment sectors in the region.
The country is predicting 25 new IPO launches in the next year and PTT, the state-owned oil conglomerate, is also planning on launching one of its major subsidiaries, PTT Oil and Retail Co, when all the state-required transfers are complete. As the brand identity of PTT is already strong in the market, its subsidiary’s IPO is likely to be lucrative for the country’s economy.
The $3.9 billion of fundraising in 2020 is nearly a billion dollars higher than last year’s earnings. In 2019, Thailand’s IPO market raised $3 billion and a deliberate, well-calculated improvement in the fundraising scene in Thailand, despite the worst recession in recent history, is an admirable feat.
In terms of foreign investments, the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) are both considering allowing foreign firms to participate in the Thai stock market. As they consider this initiative, the SEC and SET are investigating laws and regulations that will enhance foreign investment and bolster interest in the local economy.
The laws will allow and facilitate wholly foreign-owned companies to list on the stock exchange. The companies can raise funds through the SET, assisting them to thrive. They hope that the first of these companies will list as early as 2021.
All of these recent developments show promising growth in the IPO sector for Thailand. As Southeast Asia VC trends continue to support the digitalisation of the region, Thailand is using any investments it can attract as it continues working towards becoming a formidable tech hub. With an opening for foreign investments, it has positioned itself as a strong alternative to Singapore and the country’s economy will soon reap the benefits of this fruitful effort.