Southeast Asia stocks are coming to the US market - The Average Joe

    Southeast Asia stocks are coming to the US market

    Victor Lei β€” Head of Research

    Victor Lei β€” Head of Research

    March 31, 2021

    Southeast asia stocks

    March 31, 2021

    Southeast (SE) Asia’s cookin’ up some growth and they’re about to serve the US with a dish of Southeast Asia stocks including some big-name tech IPOs β€” all the way from the East.

    All the ingredients for growth

    Consisting of 10 countries (i.e. Indonesia, Singapore, Thailand, etc.) with a population of 673m (double the US), SE Asia has all the ingredients for rapid growth:

    • Sprinkle on some Industrialization, digitization, growing access to education, and a young population.
    • Add a powerhouse neighboring country, China, whose rapid growth over the past 2 decades benefited surrounding regions
    • Finish off with some foreign investments β€” which has been rapidly increasing with US investments in the SE Asia region increasing by 40%in 2019.

    But one thing soured the recipe β€” COVID, which threatened to send over 128m of the region’s population into poverty.

    While SE Asian countries are amongst the fastest growing, the region has a GDP per capita of under $5k β€” less than 1/10 of the US… Giving the region some of the highest inequality rates and uneven growth…

    One sector that’s growing rapidly, unsurprisingly…

    COVID had benefited digital economies worldwide:

    • Online spending in SE Asia is expected to nearly triple from $104b in 2020 to $309b by 2025.
    • Internet users increased by 11% in 2020 to over 400m people, which is now over 60% of the population.

    Looking to get in on the SE growth? One problem: There’s a lack of Southeast Asia stocks in the US market. Sea ($SE), one of SE Asia’s largest e-commerce companies, is an exception. Sea went public on the NYSE in 2017 and is up over 12x since.

    Aside from Sea, there aren’t many others. But that’s about to change in 2021…

    For investors… Add some Southeast Asia stocks to the menu

    Over the past decade, a massive influx of funding into SE Asian Tech companies created several unicorns (companies with a valuation >$1b).

    And now, many of these companies are gearing up to go public in 2021 β€” with the US stock markets as their preferred destination:

    • Grab, the Uber of SE AsiaΒ is in talks to go public via SPAC, Altimeter Growth Corp. ($AGC).
    • Tokopedia, Indonesia’s largest e-commerce platform, is exploring an IPO in both the US and Indonesia in 2021.
    • Traveloka, Indonesia’s biggest online travel platform, is looking at going public via SPAC in the US.

    Learn more: When is the right time to invest in an IPO?

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