- In light of global economic growth, CEOs globally (38%), in Asia Pacific (40%), and in Indonesia (32%) are feeling more optimistic than they were in the previous year.
- 93% of surveyed Indonesia-based CEOs have taken at least some steps to change how they create, deliver, and capture value over the past five years
- 56% of Indonesian CEOs believe their companies will not be economically viable in the next decade, if they continue on their current path. This is lower than the Asia Pacific average (63%).
Jakarta, 4 March 2024 – In 2023, global IPO activity amounted to US$121 billion from 1,047 IPOs, marking a 31% decrease from the previous year, which saw US$173.3 billion funds raised from 1,154 IPOs. China emerged as the largest market, raising US$45.3 billion, followed by the United States of America with US$24 billion and India with US$6.6 billion. Despite a quieter year globally, some regions, including Indonesia, reported significant growth and strong performance.
The Southeast Asia (SEA) and Hong Kong regions hosted 228 IPO deals together, generating a total of US$11.37 billion in 2023. Indonesia stood out, accounting for 51% of the region's total number of IPOs, profiting from 65% of funds raised, and cementing its position as the top performer in the SEA IPO markets. Hong Kong, securing second place, in terms of deal count with 73 listings, led funds raised with US$5.94 billion, surpassing Indonesia's US$3.55 billion. Thailand and Malaysia also made notable contributions with 37 and 32 IPO deals, raising US$1.06 billion and US$0.79 billion, respectively. Meanwhile, Singapore's IPO market was more subdued, with only 7 deals raising US$0.03 billion, indicating a quieter year for the city-state.
Indonesia in 2023 at a glance
The year 2023 has been extraordinary for the Indonesian IPO market. Regulatory reforms started in 2020, aimed to accelerate the path to public markets by capitalising on the technology startup boom, which has helped spur IPO investments in Indonesia. These reforms have led to major listings of large Indonesian tech companies. Moreover, 2023 saw the emergence of a new trend toward businesses focusing on sustainability. Utility companies engaged in renewable energy production (mining basic materials crucial for manufacturing batteries for electric vehicles) successfully launched large-sized IPOs. These accounted for 78% of the total funds raised in 2023, highlighting an increasing demand for sustainable investment in the region.
Irwan Lau, PwC Indonesia Capital Markets and Accounting Advisory Services Leader, added, "The Consumer sector led in terms of the number of IPO deals, with 70 listings over the last three years. This reflects the country's economic vitality and the middle class's growing affluence and spending power. Consumer-focused businesses are adapting to a digitally focused landscape, transitioning from traditional to tech-enabled operations and business models. This evolution not only showcases their competitive edge but also their ability to capitalise on a consumer base increasingly seeking enhanced experiences and convenience, playing a crucial role in driving Indonesia's economic growth.”
Irwan continued, “Another notable development in the Indonesian market is the increasing demand for stocks in sustainability-focused businesses, bolstering the country's energy transition initiatives. Utility companies specialising in renewable energy production, as well as miners of essential materials that are crucial for manufacturing electric vehicles batteries, were able to successfully launch large-sized IPOs in 2023. The year was extraordinary for the Indonesian IPO market. We hope the performance of the past will continue to foster increased optimism among investors in the IPO market in the coming years.”
The road ahead
The year of 2024 in Indonesia presents both opportunities and challenges. While election years historically boost certain sectors like consumer goods, transportation, and hospitality through increased spending, they also bring a degree of uncertainty, often leading to cautious investment behaviour.
Irwan added, “The anticipation of new economic policies post-election tends to make investors more cautious, favouring a 'wait and see' strategy in the early part of 2024. When this is coupled with global geopolitical uncertainties, it creates a challenging environment that demands astute navigation by business managers, investors, and policymakers alike.”
Despite these challenges, the Indonesian capital market remains a good choice for companies with robust business models looking for external financing. The Indonesian stock exchange forecasts 60-65 initial public offerings in 2024. This target, balanced with a cautiously optimistic outlook, acknowledges the election's impact while underscoring the potential of Indonesian businesses in a dynamic economic environment.
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About PwC Indonesia
PwC Indonesia comprises KAP Tanudiredja, Wibisana, Rintis & Rekan, PT PricewaterhouseCoopers Indonesia Advisory, PT Prima Wahana Caraka, PT PricewaterhouseCoopers Consulting Indonesia, and PwC Legal Indonesia, each of which is a separate legal entity, and all of which together constitute the Indonesian member firm of the PwC global network, which is collectively referred to as PwC Indonesia. Visit our website at www.pwc.com/id.
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