Southeast Asia still loves New York

HONG KONG, Jan 10 (Reuters Breakingviews) - Making it in New York still matters. Southeast Asian startups are seeking to take Manhattan even as their U.S.-listed Chinese peers retreat. This new wave is mostly listing at home first, which is good politics, and makes financial sense too.

Chinese companies have raised more than $70 billion in the Big Apple over the past decade, according to Bank of America analysts, transforming themselves and their country’s economy in the process. Yet to Beijing’s irritation, that has left more overseas investors than locals to enjoy the upside from backing tech champions such as Alibaba (9988.HK).

With political tensions and rule changes freezing the queue of Chinese aspirants, investment bankers are eyeing fast-growing companies from Indonesia, Vietnam and nearby to fill some of the gap. Governments want to keep a share of the business at home, however. Jakarta recently eased read more rules to encourage startups to float first at home, while Hanoi, which still requires a domestic listing first, has clarified how companies can go public overseas.

These are positive steps. The most ambitious firms benefit hugely from the credibility of a major capital centre, while dual listings also can help small home exchanges avoid the imbalance that results when one giant enterprise dominates a bourse. Ask Taipei and Seoul, where Taiwan Semiconductor Manufacturing Company and Samsung (005930.KS) respectively hog investor attention.

Now Indonesia’s GoTo, a merger of ride-hailing outfit Gojek and e-commerce company Tokopedia, is planning an initial public offering in Jakarta, following a $1.3 billion fundraising read more that valued it at about $30 billion. A U.S. listing should follow soon after, Reuters reported. Meanwhile, Vietnamese conglomerate Vingroup (VIC.HM) recently restructured its electric vehicle maker VinFast into an offshore unit ahead of a $3 billion U.S. IPO expected late in 2022, for which it wants a $60 billion valuation read more .

It might not be easy going at first. Bukalapak (BUKA.JK), an Indonesian e-commerce firm, has lost 44% of its market value since making its debut in Jakarta read more in August, while Singapore’s Grab is worth a third less than its original $40 billion when it reversed into a U.S. blank-cheque unit last month. Even so, New York’s bright lights will keep attracting big dreamers.

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CONTEXT NEWS

- GoTo, the Indonesian super-app formed from the merger of ride-hailing company Gojek and e-commerce platform Tokopedia, has appointed bankers for a Jakarta initial public offering ahead of a U.S. listing, Bloomberg reported on Dec. 17.

- Indonesian regulators on Dec. 7 said they would allow super-voting stock, which is permitted in New York, in a bid to encourage its startups to sell shares locally before seeking funds overseas.

Editing by Pete Sweeney and Katrina Hamlin

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Jennifer joined Breakingviews after three years as Reuters’ Asia Finance and Markets Editor. Prior to that, Jenn spent 18 years at the Financial Times covering various aspects of banking, finance and markets in London and New York before her move to Hong Kong in 2012. Jennifer has a BA in History from the University of Exeter and won a Knight-Bagehot fellowship to study at Columbia University, where she earned an MSc in Journalism studying alongside the MBA class.