US President Donald Trump’s tariff policy has sent chills through the spine of initial public offering bankers in Southeast Asia, a region dominated mostly by small- to mid-cap stocks.

While no deals have been officially canceled due to geopolitical and trade challenges, everyone is adopting a wait-and-see stance, just to see if there is a need to delay some of these market debuts, especially those that are slated in 2Q25, said bankers from Malaysia, Indonesia, and Philippines.

“This uncertainty from tariffs caused a lot of jitters in the market, has affected demand for IPOs,” said a banker based in in Kuala Lumpur, capital of Malaysia, the region’s most active IPO market in 2024.

Retail participation in the domestic IPO of Lim Seong Hai Capital last month, dropped to sub-MYR 100m from around MYR 200m indicated initially.

The major markets in the region (Indonesia, Thailand, the Philippines, Malaysia, Singapore and Vietnam) have cumulatively seen lower IPOs so far this year. The number was down to 33 (worth USD 751m) from 46 listings (worth USD 1.02bn) during the same period in 2024.

For the entire 2024, there were only 129 IPOs worth over USD 3.6bn and the overall volume recorded last year was the lowest since 2002 (22 years).

For now at least, bankers still believe that an IPO could still sail for well-positioned companies with strong fundamentals.

Survival of the fittest is the name of the game for IPOs in this kind of environment, said an ECM lawyer from Singapore.

“Healthy underlying business can still attract capital, particularly in sectors less exposed to external trade volatility, said Pham Dang Vuong, investment bank director at VNDirect Securities, a Vietnam-based firm.

Malaysia, which saw its economy grow by 5.1% in 2024 on the back of foreign direct investments for chip or data center projects, is sitting on a number of potential IPOs. Some of the biggest maiden share offerings expected in 2H25 are U Mobile, Sunway Healthcare (MYR 3.5bn or USD 852m) and MMC Port (USD 1.5bn).

The Philippines is the other country within the region that has a decent pipeline of maiden share sales. Maynilad Water Services, which aims to raise PHP 49.1bn (USD 855m) in July, is the country’s biggest IPO since 2021.

IPOs expected in Indonesia this year are those by state-owned enterprises like Pertamina Bina Medika (IHC) and PalmCo.

As an IPO market, the region’s deal volume has been falling each year since hitting a peak in 2021, although Indonesia, the Philippines and Malaysia each managed to outperform the rest in different years.

But none stood out this year so far.

Small domestic IPOs should do well if these are priced properly. It is the large IPOs that may encounter problems in this turbulent market, a Philippines-based banker said.

IPOs can be done but it would depend on the sector and issuer’s valuation expectation, said a Southeast Asia-focused ECM banker.

Investors will likely require more discount to cushion, he added.

Funding requirement, timeline review

This week’s stock market rout should also push issuers to reassess their equity fundraising plans and timelines, especially for private equity (PE) investors seeking IPO exits. Foreign hot money will not be coming in the short term, a second Philippines-based banker and Tommy Chong, manager at M&A Securities in Malaysia, said.

“Even certain industries like healthcare, retail, and telecommunications that focused on domestic market will not be spared the broader negative market sentiment and lack of investors’ appetite for risk taking,” Chong added.

For those who can afford to wait for the “noise” to die down, companies in Southeast Asia may just tap into existing bank lines, whether it is domestic or offshore, local currency or USD. The private market equity route is also available to companies in this region since investors in this segment are more willing to do transactions, the Indonesian banker said.

Private credit, albeit still emerging in Southeast Asia, is another alternative route that companies may take, this banker added.

In the meantime, issuers and investors would have to feel their way into this volatile market and cut through the noise, since there is still no clarity yet as to where this trade war is going. President Donald Trump has announced the tariffs across more than 75 countries last week only to pull back and announced yesterday a 90-day pause for the implementation of such.

“If it is mainly confined to China and the US, with both parties imposing retaliatory tariff against each other instead of negotiating for a compromise, then we will see businesses and countries adapting to this new reality. Market sentiment will start to recover, with capital and investment flowing again,” Chong said.