Executive Summary
Economic conditions globally are experiencing divergence amidst geopolitical tensions and ASEAN is no exception. In line with volatility seen in global financial markets, the capital markets in the ASEAN region have experienced periods of robust growth combined with significant downturns during the past several years.
The year 2023 was a year of uncertainty due to geopolitical tensions and macroeconomic uncertainties. Despite these uncertainties, the capital markets in the region as a whole have fared well and shown several signs of recovery in 2024. Signs of economic recovery have begun to appear in several countries with declining inflation rates, improved consumer spending and growing capital market activities. These are driven by various policy reforms and regulations in various countries.
Across ASEAN, market-based financing is growing and most of the countries in the region operate at least two different boards: a main market and a growth board (a board targeting smaller/younger and growing companies to meet their financial needs). As at the end of December 2024, a total of 4,513 companies (including on secondary exchanges) were listed on ASEAN Exchanges with a combined market capitalisation of over USD3.0trn.
Over the last few years, the use of corporate bonds by ASEAN companies have steadily grown and Sukuk or Islamic bonds also is seeing growth in the region, which has become a key sector of the financial market in countries like Indonesia, Malaysia and Brunei Darussalam.
The overall outlook for most of the capital markets in the region remains positive (we prefer to call it cautiously optimistic), while capital markets in Lao PDR and Myanmar continue to face challenges due to political instability and ongoing economic crises in the country.
However, challenges like falling investor sentiment, market illiquidity and poor market depth need to be addressed to sustain and enhance the market’s attractiveness.
ASEAN Capital Markets 2024 – An Overview
ASEAN, comprised of ten member economies was ranked the fifth largest economy globally in 2023, reaching a combined Gross Domestic Product (GDP) of USD3.7trn, equivalent to 3.6% of the world GDP in 2023. The region is home to more than 600m people, making it the third-largest market globally.
ASEAN region’s abundance of natural resources, a young and dynamic workforce and its strategic location, make it appealing to foreign investors. This rapidly expanding economy creates several challenges, including significant financing needs for corporates. A well-functioning capital market plays a key role in supporting investment, innovation and job creation, increasing the resilience of the corporate sector.
The year 2023 was a year of uncertainty due to geopolitical tensions and macroeconomic uncertainties. Each market in the region showed varied performance in 2024, however, the capital market activities in the ASEAN region as a whole offer renewed hope for an ongoing market recovery.
The market capitalisation of ASEAN listed companies reached USD2.8trn in 2023 which increased to USD3.0trn as of December 2024. The no. of listed companies on stock exchanges across the ASEAN region increased to 4,513 companies (including secondary Exchanges) as of December 2024. Based on the no. of listed companies, Malaysia ranks first with a total of 1,059 listed companies (including REITs) as of December 2024.
Source: Stock Exchange disclosures (also includes secondary board listings)
Financial companies represent a large share of the total market capitalisation in the region, and as at the end of 2023, financial companies represented 28% of total market capitalisation compared to 18% globally and 16% for Asia.
Source: Stock Exchange disclosures
As at the end of December 2024, the ASEAN region saw a total of 134 new listings compared to 163 IPOs in 2023. Though the no. of IPOs remained healthy in 2024, funds raised through these new listings have declined due to lack of mega IPOs in the region. Indonesia, Malaysia and Thailand continue to dominate the region’s IPOs, and since 2019, Indonesia led the region with the highest no. of IPOs for four consecutive years until 2023. However, Malaysia led the region with a total of 55 IPOs in 2024.
The amount raised through secondary public offerings in the ASEAN region exceeded the funds raised through IPOs following in global trends. However, the funds raised from IPOs has remained higher in Indonesia during the last few years.
Over the last few years, the use of corporate bonds by ASEAN companies have steadily grown and capital raised through corporate bonds reached USD591.5bn as of September 2024, compared to USD554.8bn and USD536.0bn in 2023 and 2022 respectively.
Sukuk or Islamic bonds (bonds that comply with Islamic Shariah Laws), also is seeing growth in the region, with sukuk financing becoming a key sector of the financial market in Indonesia, Malaysia and Brunei Darussalam.
Key Capital Markets in ASEAN – 2024
Indonesia
Indonesia boasts a dynamic and an active capital market in the ASEAN region, presenting a vibrant and diverse investment landscape. The capital market in Indonesia has shown resilience and growth over the years, as evidenced by the increase in the number of listed entities alongside a robust sukuk and a bond market.
The year 2024 was rather eventful for Indonesia with the general election, and the economy has seen a post-election surge driven by the government’s robust macroeconomic policy framework. Indonesia’s economy grew 5.0% during the first nine months of 2024, and was projected to grow at 5.1% between 2024-2026E. The domestic demand is continued to be driven by private consumption and investment growth, while unemployment rate in the country has gradually declined to 4.91% in 2024 and headline inflation also eased further during the year.
The size of the capital market (Includes stock market capitalisation and government and corporate bond and sukuk outstanding) increased to IDR19,237.0trn as at the end of December 2024 from IDR17,861.0trn as at the end of 2023 driven by growth in both IDX market capitalisation and outstanding of bond and sukuk.
The IDX stock market capitalisation increased to IDR12,672.6trn as at the end of December 2024 from IDR11,674trn in 2023. At the same time, the bond and Sukuk market also showed growth with a total outstanding value of IDR6,564.0trn compared to IDR6,187.0trn as at the end of 2023.
Source: Indonesia Financial Services Authority
The total funds raised from IPOs and Rights Issues accounted for IDR8.83trn and IDR36.3trn respectively in 2024 compared to IDR54.3trn and IDR56.2trn from IPOs and Rights Issues respectively in 2023. There were 78 new listings in 2023, which dropped to 40 companies in 2024. The IPO market in the country saw a notable decline during the year as companies opted for a “wait-and-see” approach until a new government was formed.
Source: Indonesia Financial Services Authority
In 2024, public offering of government bonds and Sukuk contributed IDR739.2trn (2023: IDR722.9trn) to the total funds raised while corporate bonds and sukuk offering contributed IDR150.6trn (2023: IDR139.8trn) during the year.
Source: Indonesia Financial Services Authority
Amidst the slowdown in fund raising activity in 2024, the IDX Composite Index (IHSG) experienced a marginal decline from 7,272.8 points in December 2023 to 7,079.9 points as at the end of December 2024. The no. of listed companies on the stock exchange increased to 943 vs 903 as at the end of December 2023.
Source: Capital IQ
Source: Indonesia Financial Services Authority (IDX Composite Index o LHS)
The average daily trading volume as at the end of December 2024 was approximately 22,348.3m shares with a value of IDR13,703.5bn. The no. of investors on Indonesia capital market reached 14.8k (no. of SIDs) by the end of December 2024 (2023: 12.17m). This growth was driven by various educational and promotion activities carried out by the IDX together with the Financial Services Authority.
As at the end of December 2024, the assets of the country’s fund management industry reached IDR840.07trn as at the end of 2024, recording a 1.37% YoY increase.
Malaysia
Malaysia has become one of the fast-growing regions in ASEAN, and the country’s economy was projected to grow 5.0% in 2024. Malaysia has established itself as a cost -competitive market for investors to set up operations, while signing extensive free trade agreements with a large no. of countries to position the country as an ideal location for investment.
Malaysia also boasts as one of the key hubs for Islamic finance and offers a large no. of Shariah-compliant Islamic financial products and services. The country hosts a robust market for Shariah-compliant equity and Sukuk markets. Malaysia is the largest Sukuk market globally, with 60% of its fixed income assets invested in Sukuks.
The Malaysian capital market in 2023 showed a mixed performance due to concerns over geopolitical tensions which created economic uncertainty. However, the capital market continued to show strong recovery in 2024 with FBMKLCI hitting a 45-month high on 30th August 2024. The IPOs in the country showed a vibrant performance during the year, with 55 new listings (vs 32 new listings in 2023) including mega IPOs of 99 Speed Mart, Johor Plantation and Prolintas Infra Business Trust.
The size of the Malaysian capital market increased to RM4.2trn as at the end of December 2024, from RM3.8trn as at the end of 2023. This growth was driven by increase in the capitalisation of both Bursa Malaysia and bonds and sukuk outstanding.
Source: Securities Commission Malaysia, Bonds+Sukuk Information Exchange, Malaysia
Funds raised during 2024 showed strong increase compared to funds raised in 2023 driven mainly by IPO fund raising activity. Fund raising in the secondary market showed some improvement during 2024 after seeing a sharp decline in 2023 due to lower corporate activities.
Source: Bursa Malaysia
Similarly, corporate bonds and sukuk issuance during the year showed strong improvement, after seeing a decline in 2023.
Source: Bonds+Sukuk Information Exchange, Malaysia
During 2024, 55 companies sought new listings in Bursa Malaysia raising total funds of RM7.48bn vs 32 IPOs raising a total of RM3.5bn in 2023. A majority of new listings during 2024 were on ACE Market with 40 IPOs (2023: 24 IPOs on ACE Market), indicating strong activity among smaller companies.
Source: Bursa Malaysia
The Average Daily Trading Value (ADV) during 2024 was 53.2% higher vs 2023, driven by increase in both retail and institutional ADV.
Source: Bursa Malaysia
As at the end of December 2024, there were 1,059 companies (Main Market: 811, ACE: 201 and LEAP: 47) listed on Bursa Malaysia compared to 1,014 companies (Main Market: 793, ACE: 173 and LEAP: 48) listed as at the end of 2023.
Kuala Lumpur Composite Index (KLCI/FBMKLCI) closed at 1,642.3 points as at 31st December 2024 from 1,454.7 points as at the end of December 2023, offering a 13.0% return.
Source: Capital IQ
The derivatives traded volume (total annual contracts) rose to 22.7m contracts in 2024 vs 17.8m in 2023. This exceptional performance was driven by Bursa Malaysia Crude Palm Oil Futures (FCPO). The total AUM of the fund management industry was valued at RM1,081.58bn as at the end of November 2024 compared to RM993.9bn as at the end of 2023.
Singapore
As per the Ministry of Trade and Industry, Singapore’s economy grew by 4.0% in 2024 compared to 1.1% in 2023. The country’s economy had a lacklustre performance during 1H2024; however, second half of the year marked a strong recovery driven by broader growth across manufacturing and other sectors in the nation.
Singapore has a vibrant and a dynamic capital market which has helped attract a large no. of domestic and foreign investors. Singapore Exchange had a stellar performance in 2024, with the Straits Time Index (STI) reaching a new high at 3,787.60 points as at the end of December 2024, gaining 17.0% from 3,240.3 points recorded as at the end of 2023. This marks the highest return in a decade for the index.
Source: Capital IQ
The recent rally in the Straits Time Index (STI) is driven by the country’s banking stocks which have surged on the back of their ability to maintain profitability despite lower interest rates. Better-than-expected earnings of Industrials also contributed to the rally in STI.
The no. of listed companies on the Stock Exchange dropped to 617 companies as at the end of December 2024 from 632 in December 2023. During 2024, there were four primary listings on the Singapore Exchange which raised a total of SG$46.0m. There were five Singapore companies that sought for overseas listings in the US during the first half of 2024.
The total market capitalisation of the stock Exchange increased to SG$865.9bn as at the end of December 2024 from SG$802.64bn in 2023 due to the outperformance of large cap banks.
Source: Singapore Exchange Group (SGX)
The Financial sector continues to dominate the market capitalisation in terms of industry classification, accounting for 58.1% of the total market capitalisation as of December 2024, followed by Industrials (9.7%).
Source: Singapore Exchange Group (SGX)
The total securities market turnover value on the Exchange was SG$305.37bn for the year ended 2024 vs SG$258.5bn for the year ended 2023, while the market turnover volume reached 338,364m shares in 2024 vs 340,833m shares in 2023.
Source: Singapore Exchange Group (SGX)
In 2024, there were a total of 921 bond listings which raised a total of SG$310.1bn compared to 958 listings that raised SG$270.7bn in 2023. As at the end of September 2024, the total bond outstanding was SG$836.3bn compared to SG$758.0bn as at the end of December 2023.
Source: AsianBondsOnline
The derivatives traded volume rose to 23.19m contracts in December 2024 from 21.15m contracts in December 2023, with derivatives daily average volume (DDAV) reaching 1.09m as at the end of December 2024 vs 1.04m as at the end of December 2023.
Thailand
Thai economy has navigated challenges from both domestic and international sources during the last 2 years. The country’s political instability and geopolitical tensions have led to poor performance of the stock market. The country’s GDP is forecast to grow at around 2.7% in 2024, after seeing a subdued performance in 2023 where the country’s GDP growth rate dropped to 1.9%.
The Stock Exchange of Thailand (SET) faced several challenges in 2023 due to economic slowdown while reporting of several online fraud cases which led to lower investor confidence. As a result, the SET Index declined to 1,415.8 points as at the end of December 2023, losing 15.2% compared to index value as at the end of December 2022. The SET Index declined further in 2024 closing at 1,400.2 points as at the end of December 2024.
Source: Capital IQ
The no. of listed companies on the Stock Exchange of Thailand has continued to increase during the last five years from 568 in 2020 to 627 in 2023, and reached 640 as at the end of December 2024. Similarly, the no. of listed companies on the Market for Alternative Investment (mai) also increased to 220 stocks as at the end of December 2024 from 213 in 2023.
Source: Stock Exchange of Thailand (SET)
Despite the challenges in 2023, Thailand’s IPO market showed resilience with 40 IPOs raising THB45.3bn, however, there were only 32 new listings in 2024 raising a total of THB28.7bn. This significant decline compared to the previous years is due to global economic challenges and domestic political uncertainties. At the same time, the new regulation that requires companies seeking for listings to submit three years of audited financial statements prepared under Thai Financial Reporting Standards also had a negative impact on the no. of new listings.
Source: Stock Exchange of Thailand (SET)
Source: Stock Exchange of Thailand (SET)
The SET Index’s market capitalisation improved marginally to THB17.433trn as at the end of December 2024 after declining 14.7% YoY in 2023 to THB17.430trn.
Source: Stock Exchange of Thailand (SET), Market Capitalisation of mai on RHS
The daily average turnover volume (of SET) has decreased to 8,838m shares as of December 2024 from 13,700m shares in 2023.
Source: Stock Exchange of Thailand (SET)
The outstanding value of Thai bond market increased 3.7% to THB17.1trn as at the end of September 2024 from THB16.5trn in 2023. The government bonds accounted for 58.7% of the total outstanding bond value as at the end of September 2024.
Source: AsianBondsOnline, Bank of Thailand
Philippines
Philippines has adjusted its economic growth target for 2024 to a range of 6.0% to 6.5%, down from the previous high end of 7.0%, citing domestic and global uncertainties. The Philippines’ economy grew by 5.6% in 2024 driven by recovery in public consumption, construction investments, and exports. The inflation in the country has eased further from 2023 levels due to the government’s price control measures and tight monetary policy.
The country’s economic growth has been increasingly driven by capital investments, despite having an under developed public capital market. Currently, market-based financing remains limited, with low activity in both equity and corporate bond markets. Overall, funding for the non-financial corporate sector through banks and capital markets is significantly lower than that of more developed ASEAN peers, restricting many businesses from accessing external funding.
Source: Capital IQ
The Philippines Composite Index (PSEI) saw a strong recovery during 9M2024 touching near 7,500 levels, however, towards the end of 2024, the index began to move downwards closing at 6,528.79 points.
The no. of listed companies on the Stock Exchange remained flat at 283 companies as at the end of December 2024, there were 3 new listings during 2024 which were offset by the same number of delisting during the year.
Source: The Philippines Stock Exchange
The total market capitalisation of the stock Exchange increased to PHP20.0trn as at the end of December 2024 from PHP16.7trn in 2023.
The Philippines Stock Exchange has experienced a declining trend in average daily trade value, from PHP9.0bn in 2021 to PHP6.1bn in 2024. This reflects challenges such as economic uncertainty and reduced investor confidence. However, signs of recovery have emerged in 2024, driven by net positive foreign transactions that reflects renewed investor confidence, likely supported by favourable economic indicators and market reforms.
Source: The Philippines Stock Exchange (Net foreign transactions in RHS)
Further, the Bangko Sentral ng Pilipinas (BSP, the Central Bank of the Philippines) unveiled a new interest rate swap market, a major initiative aimed at enhancing trading and liquidity in the domestic bond market.
Source: AsianBondsOnline
As of September 2024, the outstanding value of sustainable bonds in the Philippines reached USD10.9bn, marking a 20.7% QoQ increase due to heightened corporate issuance. This growth reflects the country’s commitment to sustainable finance, with both government and corporate sectors actively participating in green, social, and sustainability bond issuances. The country’s focus on renewable energy and infrastructure development has encouraged companies to pursue sustainable financing options.
Source: AsianBondsOnline
Vietnam
Vietnam’s economy expanded by 7.09% in 2024, driven by strong activity in key sectors, including exports, retail, real estate, tourism, and manufacturing. This growth exceeds the National Assembly’s projected GDP growth range of 6.0-6.5%.
Despite the strong development of the Vietnam’s capital market, it has been facing several challenges including an underdeveloped institutional investor base. The lack of strong domestic institutional investors has left the equity markets dominated by individual investors, leading to volatility and has resulted in increased risk for the corporate bond market and has challenged the stock market’s role as a reliable fundraising channel for businesses.
Vietnam’s capital market operates across three key platforms, 1) Ho Chi Minh Stock Exchange (HoSE) which is the largest and primary exchange, focuses on large-cap companies, 2) the Hanoi Stock Exchange (HNX) which caters to mid- and small-cap companies, as well as bond and derivatives trading, and 3) the Unlisted Public Companies Market (UpCom) provides a platform for unlisted firms to trade shares before listing on the main exchanges.
As of the end of December 2024, the VN-Index (benchmark to measure the overall performance of HoSE) closed at 1,266.78 points gaining around 12.0% during the year. Meanwhile, the HNX-Index closed at 227.4 points, compared to 231.0 points as at the end of 2023.
Source: CapIQ
As of December 2024, HoSE had 393 listed companies (maintaining the same number as in 2023) with a total market cap of VND5,200trn vs VND4,550trn as at the end of 2023. As at the end of 2024, HoSE had 40 listed companies with market cap over USD1bn, including two companies over USD10bn, namely the Bank for Foreign Trade of Vietnam (VCB) and the Joint Stock Commercial Bank for Investment and Development of Vietnam (BID).
Source: State Securities Commission of Vietnam Portal
In 2024, 2m new securities trading accounts were opened by individual investors, and the number of total securities trading accounts held by individuals in Vietnam reached 9.2m as at the end of 2024, while domestic institutional investors added 1,502 accounts, taking their total to 17,737 accounts as at the end of the year. Further, Vietnam expects the securities trading accounts held by domestic investors to reach 11.0m by 2030, and this could likely to be achieved earlier than 2030.
The average trading volume reached 731.0m during 2024 compared to 736.7m in 2023, while the average trading value moved in line with volume growth reaching VND18.8trn during 2024 compared to VND15.1trn in 2023. This was mainly driven by increase in foreign investor net sales of VND76.7trn in 2024 compared to VND19.5trn and VND23.6trn respectively in 2023 and 2022.
Source: State Securities Commission of Vietnam Portal
As of September 2024, the total local currency bond outstanding was VND3,551trn. The government bond outstanding has continued to grow steadily over the last few years which has grown from VND2,060trn in 2022 to VND2,504trn in September 2024.
Source: AsianBondsOnline
Myanmar
Myanmar’s GDP growth was forecast to remain flat at 0.8% in 2024 (Source: ADB) as the country’s political instability has affected the country’s economic activities. The country’s economy continues to face significant challenges due to political conflicts, macroeconomic instability and shortage of imported inputs and electricity.
Myanmar’s Yangon Stock Exchange’s market cap surged to MMK737.0bn as at the end of December 2024 from MMK692.7bn in 2023. The no. of companies listed on the stock exchange remained flat at 8 as at the end of December 2024, and the country’s last IPO was in 2023, the listing of Myanmar Agro Exchange Public Co.
Source: Yangon Stock Exchange
The MYANPIX index last closed at 391 points as at the end of December 2024, gaining 6.3% YTD.
Source: Yangon Stock Exchange
Cambodia
As per the Ministry of Economy and Finance, Cambodia’s economy was projected to have grown at 6.0% in 2024, up from 5.0% in 2023 driven by the country’s export-oriented sectors.
With the fast growth of the economy, the country’s capital market also has gained significant attention. As of December 2024, there were 11 companies listed on the Cambodia Stock Exchange (CSX), unchanged from the previous year. The country also introduced a Growth Board in 2021, for the listing of SMEs.
Source: Cambodia Securities Exchange
The market capitalisation of the above stocks stood at KHR11,171.59bn as of December 2024, a 12.7% decrease from KHR12,805.1bn as at the end of December 2023. The CSX index dropped to 413 points as at the end of December 2024 from 473 points as of December 2023.
Source: Cambodia Securities Exchange
The no. of trading accounts has increased from 48,186 in 2023 to 58,394 accounts as of December 2024 suggesting that the country’s capital market is gaining momentum.
As of 30 September 2024, the amount of local currency denominated bonds stood at KHR1,020bn compared to KHR750bn as at the end of December 2023.
Source: AsianBondsOnline
Lao People’s Democratic Republic (Lao PDR)
Lao PDR’s economic conditions remain difficult, marked by high inflation, currency devaluation, and declining economic growth. Persistently high inflation (estimated at 24% in August 2024) has led to poor standard of living undermining the development of human capital.
The economy is estimated to have grown at 3.7% in 2023, and 2024 growth is estimated to be 4%, however the outlook remains highly uncertain. The no. of companies listed on the stock exchange has remained at 11 since 2019, however, in July 2023, there was a voluntary delisting of one stock leading to total no. of listings to 10 companies as at the end of 2024. The country last saw an IPO in 2019 (listing of two new companies), there has not been any fundraising in the stock market since then.
The Lao Stock Index (LSX Composite Index) closed at 1,150.1 points as at the end of December 2024, from 1,079 points as at the end of December 2023. The market capitalisation has increased to LAK14,791bn as at the end of December 2024 from LAK13,881bn as at the end of December 2023.
Source: Lao Securities Exchange
Of the 10 listed companies, Lao ASEAN Leasing Public Company (LALCO) contributed nearly 44.8% of the current market capitalisation, while the top three large companies (LALCO, EDL-Gen and PCD) contributed nearly 85% of the market capitalisation.
Brunei Darussalam
After two years of recession, Brunei’s real GDP increased by 1.4% and the country’s economy is mainly driven by non-Oil & Gas sector. The country’s economy is projected to grow at 2.4% in 2024 on the back of increased production of Oil & Gas.
Though Brunei has an open economy, the country does not have a stock market. However, the country is ranked 13th out of 136 countries globally in the Islamic Finance Development Report 2024.
Islamic Finance has become one of the key sectors in the country’s financial services industry. Brunei government’s Sukuk Al Ijarah is an eligible collateral for the country’s central bank lending. In 2023, Brunei issued a total of BND99.9m worth of Sukuk bills and in 2024 (until 5th December 2024), a total of BND820m worth of sukuk bills were issued by the central bank. Brunei started offering sukuk securities in April 2006, and so far, has issued BND17.40bn worth of sukuk securities. The total sukuk bond outstanding as at 5th December 2024 was BND321.35m.
ASEAN Capital Market Outlook
The capital markets in the ASEAN region as a whole have showed improved performance in 2024 compared to 2023. Countries like Indonesia, Malaysia, Singapore, Thailand, Vietnam and Cambodia are expected to see the growth momentum continue into 2025.
Investors in the region continue to exercise caution given the macroeconomic uncertainty, geopolitical tensions and high interest rates. However, the ASEAN region continues to remain a dynamic growth location among emerging economies due to the following:
Positive Economic Growth Projected for Key Countries in the Region
The ASEAN region is expected to witness positive economic growth in the coming years, driven by robust domestic demand, increasing foreign investments, and government initiatives to boost economic activities. Countries like Indonesia, Thailand, and Malaysia are projected to see significant economic expansion, which is likely to create a favourable environment for fund raising.
Availability of Quality Start-Ups
The availability of quality start-ups in the ASEAN region is another factor contributing to the positive IPO market and fundraising in the region. Countries like Singapore and Indonesia have thriving start-up ecosystems, supported by government incentives, venture capital investments, and incubators. These start-ups are increasingly looking to the public markets to raise capital for growth and expansion.
Positive Capital Market Initiatives
Several positive capital market initiatives are being implemented across the ASEAN region, aimed at enhancing market efficiency and attractiveness following the downtrend in 2023. These initiatives include the enhancement of surveillance and good corporate governance, digitisation of capital markets and new policy reforms, example, Indonesia and Malaysia have been actively working on improving their regulatory frameworks to attract more investors and issuers while Singapore has established a task force to revive the capital market in the country.
Strong IPO Pipeline in Key Sectors
The ASEAN region has a strong IPO pipeline in the consumer, energy, and resource sectors, including the Electric Vehicle (EV) supply chain. Indonesia is poised to benefit from its rich natural resources and growing energy sector, with several companies in the mining and EV supply chain sectors preparing for public listings. Thailand and Malaysia also have robust pipelines in the consumer goods and industrial sectors, driven by growing domestic markets and increasing consumer demand.
Growing Demand for Sustainability-linked Bonds
Sustainable financing is growing in the region and countries in the region have already adopted policies and frameworks to support the scaling up of sustainable bond markets. The sustainable bond outstanding grew 29.3% YoY in 2023 in the ASEAN and within the region, Indonesia, Thailand, Singapore, Malaysia and Philippines have made progress in this area by developing relevant standards for green and sustainable bonds and we expect an uptick in sustainable and green bonds in the region going forward.
Indonesia: Strong Listing Pipeline
The Indonesian capital market will continue to be influenced by the Central bank policies and geopolitical developments. The rate cut in September alongside easing of inflation should encourage new listings and strong performance of the capital market in the country.
IDX is targeting 66 IPOs for 2025, and there are already 28 companies in the pipeline for listing suggesting that fund raising by companies and capital market activities should continue to expand in 2025. Of the 28 potential new listings above, sixteen are said to be large enterprises (assets exceeding IDR250bn) from basic materials, consumer, energy, finance, real estate and infrastructure sectors.
In addition to new listings, IDX has 19 pending debt and sukuk issues from 14 issuers, and 9 companies are awaiting approval for rights issues. As per Fitch ratings, Indonesia will remain one of the largest sukuk issuers in the emerging market in the medium term driven by government fund diversification and Islamic-finance development goals.
In November 2023, the Hong Kong Stock Exchange (HKEx) added Indonesian Stock Exchange (IDX) as a recognised exchange and this status should allow companies listed on the IDX to apply for a secondary listing in HKEx. Though there aren’t any companies in the pipeline seeking for dual listing on the HKEx, this recognition should make IDX more appealing for international investors and further enhance the efficiency of the country’s capital market.
Regulators in Indonesia are increasingly exploring policies to support growth companies to tap capital markets for growth, and we think this should bode well for capital market in the country.
As large infrastructure projects are underway, Indonesia is facing resource constraints and regulators believe that capital markets play a key role in meeting the financing requirements for these projects. This suggests that the capital market activities will continue to expand going forward in Indonesia.
Malaysia: Growth Momentum to Continue
The Malaysian economy is projected to maintain steady growth in 2025 backed by strong domestic demand and private sector spending. Domestic economic indicators including the inflation, unemployment rate and CPI all point towards improving economic activities and financial conditions in the country.
The favourable momentum experienced in 2024 is expected to continue well into 2025. The domestic equity market performance will be underpinned by the government of Malaysia’s policy reforms, infrastructure development, foreign investments, etc. Under the Strategic Roadmap 2024-2026 plan, several initiatives have been launched to strengthen market activities which we think should further increase the market activities.
The Malaysia Exchange has brought in new measures to grow IPOs including large listings, some of these measures include expedited IPO approval process (to approximately 3-months since 01st March 2024), accelerated process to transfer stocks from ACE Board to the Main Board, tax deductions for listings of tech companies and offer innovative solutions to boost investor participation. Bursa Malaysia is confident that the IPO market will remain healthy in 2025 with over 30 issues in the pipeline. So far, there has been 3 new listings in the ACE Market during 2025.
The government’s structural reform plans under the Economy MADANI Framework have supported the strong performance of the economy which is expected to continue. The financial sector in Malaysia remains sound and the capital market is expected to remain orderly.
Singapore: Policy Reforms to Support Capital Market Despite Geopolitical Uncertainty
Looking forward, we remain positive on the Singapore Capital Market as the market has already begun to deliver strong performance and outperform other markets in the region. As we discussed before, the Straits Time Index had a strong rally in 2024 closing at 3,787.60 points as at the end of December 2024, making it the best-performing stock market in ASEAN.
The Central Bank of Singapore expects the country’s GDP to grow by about 2-3% in 2025, however, heightened global uncertainties including geopolitical tensions and slowdown in China could have an adverse impact on the economy.
Singapore has established a task force to revive the stock market by addressing issues with liquidity and drop in new listings on the country’s stock exchange. The newly formed task force will submit an action plan by August 2025. There were 4 new listings in 2024 showing signs of a recovery in the country’s IPO market.
The Monetary Authority of Singapore (MAS) kept its Singapore dollar policy unchanged in October, however, MAS may consider easing monetary policy in order to boost liquidity conditions and growth. Structural stocks such as those in financial services, renewable energy, data and utilities are forecast to perform strong in 2025.
We expect the new policy measures to help enhance liquidity through capital injections and boost valuations.
The Singapore Stock Exchange has remained an attractive hub for REIT listings including listing of overseas REITs, however, REIT listings were absent during the last two years. However, there seems to be renewed interest towards REIT listings including reported plans for listing of a data center which could raise as much as $1bn. Mainboard listed Centurion Corp also announced in January that it is exploring an SGX REIT listing of some of the group’s workers accommodation and student accommodation assets. REIT valuations trend lower due to high borrowing costs as they use debt to fund their expansion projects and dividend stocks become less appealing when bond yields are high. Global decline in interest rates will make REIT listings attractive to investors and we expect a recovery in REIT sector listings in 2025.
Thailand: Cautious Optimism
Thai economy is forecast to grow by 3% in 2025 on the back of government spending, growth in tourist arrivals and export. The government of Thailand has taken several measures to drive the economy including a key rate cut and stimulate fundraising activities.
Thai economy in 2024 shows some recovery and the no. of new listing is expected to show a moderate growth driven by the government’s economic support measures and regulatory reforms including an increase in the approval of investment certificates for foreign investors and governance standards. The key rate cuts and government budget allocations should help recovery in stock performance.
There are more than 100 SMEs and startups participating in the Acceleration Program by LiVE Platform to prepare readiness for listing by 2027. The upcoming IPOs in the Thai Stock Exchange are expected to be from consumer, life sciences and healthcare sectors, as well as from REITs as many companies are looking to capitalise on opportunities in Thai Stock Exchange (source: Bangkok Post).
However, challenges remain including political uncertainties and stringent compliance regulations which should discourage smaller companies to seek for listing.
Philippines: Sustainable Growth Amidst Global Challenges
The Philippines capital market in 2024 showed promising growth despite global economic uncertainties and geopolitical risks. The outlook for the market is largely influenced by government policies, a strong retail investor base, and a focus on sustainable finance.
The government’s continued efforts to stimulate economic growth through infrastructure spending, alongside the Bangko Sentral ng Pilipinas’ likely rate cuts, should encourage more investments in both equity and bond markets. The surge in sustainable bond issuances signals the market’s shift toward green and socially responsible investing, with both local and foreign interest in these instruments growing.
The Philippines is expected to see a strong pipeline of new listings, particularly in sectors such as real estate, technology, and energy, as companies look to tap capital markets for funding. This is complemented by a robust pipeline of corporate bonds, which are expected to remain a key funding tool for the Philippine companies.
Further, digitalization in the capital market, especially through platforms like GStocksPH, should continue to drive retail participation and increased market liquidity. Further, the Bangko Sentral ng Pilipinas (BSP, the Central Bank of the Philippines) unveiled a new interest rate swap market, a major initiative aimed at enhancing trading and liquidity in the domestic bond market, which should further support the country’s capital market development.
The Philippines government is set to reduce the stock transaction tax from 0.6% to 0.1% under the Capital Market Efficiency Promotion Act (CMEPA). This reform aims to improve the competitiveness of the Philippine Stock Exchange (PSE) by lowering trading costs and attracting more investors. The PSE has faced challenges with low daily trading volumes and a limited number of listed companies, which have hindered its growth and market activity.
Overall, despite global challenges, the Philippine capital market is set to experience steady expansion with increased listings, strong bond issuance, and growing investor participation.
Vietnam: Economic Growth and Structural Reforms to Drive Capital Market Activity
Vietnam’s strong economic fundamentals and growth-oriented policies have helped the country’s strong growth in capital market, and is expected to see strong growth on the back of the country’ strong economic growth. The Government of Vietnam has set an even more ambitious goal of 8% GDP growth for 2025, aiming to achieve double-digit growth between 2026–2030.
As we mentioned before, having an underdeveloped institutional investor base continues to remain a challenge, hence requires structural changes to the capital market. The stock market is mostly dominated by retail investors; new government policies and new initiatives have to be implemented to attract new institutional investors to the market.
Recently, The Ministry of Finance, Vietnam introduced “Circular 68” which is a significant turning point for the country’s stock market, as it removes the long-standing requirement for foreign investors to secure 100% pre-funding for their stock market transactions. This will simplify the investment process for foreign institutional investors and should help attract substantial foreign capital.
In November 2024, the National Assembly of Vietnam approved the amendment to the Security Law which aims to enhance transparency and efficiency in securities issuance and sales. Key changes to regulations on professional investors, public offerings, private placements, and public companies, is expected to encourage a more favourable investment climate in the country.
The corporate bond market is also set to expand with new amendments to regulations, as individual investors are now allowed to participate in the purchase, trading, and transfer of private placement corporate bonds.
Myanmar – Ongoing Crises to Impact Capital Markets
Ongoing political conflicts and recent natural disasters in Myanmar have severely impacted the country’s economy, with GDP projected to grow by 1.7% in 2025 (source: ADB). Yangon Stock Exchange has undertaken several measures including webinars and training courses to create awareness among public to promote the capital market in the country. However, with compounding crises in the nation coupled with challenges such as falling investor sentiment and market illiquidity should negatively impact the country’s capital market.
Cambodia – Strong Prospects Ahead
Cambodia’s economy is projected to grow by 6.3% in 2025. Cambodia’s capital market is still in early stages, but demonstrates strong growth potential. The Cambodian government has initiated several development measures to develop the country’s capital market including electronic entry system, policies to enhance digital governance and enhance trade mechanisms.
The Pentagon Strategy, a long-term national development plan aimed at turning Cambodia into a high-income country should also drive growth of the capital market. The government has prioritized infrastructure sector reforms which should be a strong growth driver for capital markets, as enterprises involved in these projects will turn to capital markets for fund raising.
Lao PDR – Economic Uncertainty to Negatively Impact Capital Market
As per the World Bank estimates, GDP growth in 2025 will drop to 3.7% (vs 4.1% estimated for 2024). Lao PDR has large public debt where total public and publicly guaranteed debt stood at 115.9% of GDP at the end of 2023 (Source: World Bank).
Lao PDR continues to face high inflation rates, political uncertainty, elevated interest rates, persistent depreciation of currency and depletion of foreign reserves. These factors have already contributed to subdued performance of the country’s stock market.
Conclusion
The capital markets in the ASEAN region have showed varied performance over the years, however, the capital market in the region as a whole has demonstrated resilience and growth despite facing numerous challenges.
Indonesia, Malaysia, Thailand, Singapore, Philippines and Vietnam have been the most active capital markets in the region. 2023 was a year of uncertainty, however, the capital markets in the region as a whole have shown resilience and renewed hope of a recovery. The overall outlook for most of the markets in the region remains positive (we prefer to call it cautiously optimistic), while capital markets in Lao PDR and Myanmar continue to face challenges due to political instability and ongoing economic crises in the country.
Policy reforms, capital market initiatives, digitisation of capital markets and increased awareness and training should further drive capital market activity in the region. The abundance of natural resources in the region and growing consideration over sustainable development in the region have resulted in a strong IPO pipeline in key sectors such as Industrials, energy, and the EV supply chain, suggesting robust future capital market activity.
However, challenges like falling investor sentiment, market illiquidity and poor market depth need to be addressed to sustain and enhance the market’s attractiveness. Limited trading volumes and a lack of depth in the investor base can lead to higher volatility and reduced attractiveness of these markets for both issuers and investors.
The primary bond markets in some countries in the region face volatility, leading to increased cost associated with security issuance and limited funding diversity. On the other hand, the corporate bonds in most of the markets in the region have short maturity periods, thereby limiting access to long-term funding.
Efforts to enhance market liquidity, such as encouraging more retail and institutional participation, promoting transparency, regulatory reforms to that eases access to funds and deepening the investor base are critical to address the above challenges.
