KUALA LUMPUR: Bursa Malaysia remains among the most active exchanges in Asean despite a global slowdown in initial public offering (IPO) volumes and proceeds. 

Ernst & Young Consulting Sdn Bhd (EY) noted that Asean had seen a total of 96 IPOs, raising US$3.8 billion.

This was up by four per cent in deal numbers and a decline in 57 per cent in proceeds year-on-year (YoY). 

"The notable decline in proceeds was due to a lack of mega IPOs, mainly IPOs with proceeds equal to or greater than US$1 billion in year-to-date (YTD) 2022. 

"Asean exchanges that were most active YTD were Indonesia (45 IPOs raising US$1.5 billion), Malaysia (25 IPOs raising US$0.7 billion), and Thailand (13 IPOs raising US$1.3 billion), followed by the Philippines (seven IPOs raising US$0.3 billion) and Singapore (seven IPOs raising US$33 million)," it said.

Globally, there were a total of 992 IPOs with US$146 billion proceeds, a 44 per cent and 57 per cent decrease YoY respectively to date. 

EY said this followed the trend for the year in which IPO companies and investors were faced with mounting macroeconomic challenges, market uncertainties, increasing volatility and falling global equity prices. 

The technology sector continued to lead by number of IPOs, although the average deal size came down from US$261 million to US$123 million YoY. 

While the energy sector overtook by proceeds with the largest increase of 176 percent, driven largely by three of the global top five deals YTD, the consumer products sector witnessed the biggest drop in average deal size at 69 per cent.

"The third quarter (Q3) of 2022 saw the lowest special purpose acquisition company (SPAC) IPO proceeds since Q3 2016, along with de-SPACs struggling to find the right targets. 

"The SPAC market was continually challenged this quarter with only 17 deals, raising US$0.9 billion. 

"A record number of existing SPACs are actively seeking targets, with the majority facing potential expiration in the next year," EY said.

Major economies and financial markets in the Americas and Europe, and the Middle East, India and Africa (EMEIA) remained under pressure as quantitative tightening kicked into a higher gear.

America's exchanges saw the sharpest decline with only 116 deals raising US$7.5 billion YTD, a decrease of 94 per cent in proceeds and 72 per cent in volume YoY.

In direct contrast to a record-breaking year in 2021, America's IPO activity sank to its lowest level in 20 years.

Meanwhile, EMEIA IPO activity fell by 50 per cent and 52 per cent by number and proceeds, respectively.

Europe dropped 76 per cent in proceeds, but the Middle East continued to be a rare bright spot with a 209 per cent increase in proceeds, despite a 51 per cent decrease in the number of deals.

As the region has been less impacted by inflation and geopolitical issues, Asia Pacific exchanges performed relatively better, housing five of the top 10 global IPOs.

To date, it contributed 61 per cent and 69 per cent of the global share of IPOs and proceeds, respectively. 

However, it still registered YoY declines of 25 per cent by deal number and 22 per cent by deal size.

EY global IPO leader Paul Go said with uncertainties being the IPO market's biggest challenge, companies and investors continue to wait for a more stable and positive stock market sentiment before any sustained appetite for IPO activity re-emerges.

EY report also noted that in the Americas, IPO pipelines were waiting for the market to reopen next year, and in EMEIA, tough market conditions continued to squeeze IPO windows. 

As for APAC, activity remained strong in the background as companies evaluate their options for 2023. 

"Many companies' IPO plans were put on ice in early 2022, in anticipation of more favourable market conditions. 

"Providing market uncertainties and volatility subside, the launch of long-awaited blockbuster IPOs together with improved after-market returns may reverse the sentiment and attract more companies to follow," added Go.