The nation’s initial public offering (IPO) activity is set to rebound next year after taking a hit from the COVID-19 pandemic this year, with technology and biotech companies expected to dominate the market, consulting firm Ernst & Young (EY) Taiwan said yesterday.
As of yesterday, there had been 10 IPOs in the nation that raised a total of NT$6.74 billion (US$236.3 million) this year, Ernst & Young Taiwan assurance head Lin Tu (涂嘉玲) told a media briefing.
That represented a 33 percent decline from last year in terms of IPOs and a 71.1 percent slump by measure of the capital raised, Tu said, attributing the lackluster performance to the COVID-19 pandemic, even though Taiwan has effectively controlled the outbreak.
Photo: Liu Hsin-de, Taipei Times
Three companies, including VIA Labs Inc (威鋒電子), are poised for primary listing on local bourses this month, Tu said, adding that the overall showing might improve.
The number of IPOs on the Taipei Exchange dropped 20 percent from 20 last year to 16 as of yesterday, but they raised 27.8 percent more capital, thanks to a flush of liquidity that repeatedly drove the TAIEX to record highs and might continue to lend support, Tu said.
The number of IPOs could reach 50 next year, as 18 firms have already filed applications and could win listing approval next quarter, Tu said.
The Financial Supervisory Commission (FSC) has unveiled plans to create two new boards that feature companies with innovative ideas, operations or business models, but lack financial resources to demonstrate their business potential and profitability.
FSC Chairman Thomas Huang (黃天牧) has set a goal of listing 10 companies on the respective boards that would be launched in the third quarter of next year to help Taiwan identify and groom its own unicorn companies — those valued at more than US$1 billion.
The effort, coupled with an economic recovery at home and around the world, would make 50 IPOs achievable next year, Tu said, adding that technology and biotech companies would continue to be the main participants as in the past few years.
An environment of monetary easing is favorable for the capital markets, Tu said, calling the average price-to-earnings ratios of 21 times for shares listed on the Taiwan Stock Exchange and 27 times for those on the Taipei Exchange “reasonable.”
Taiwanese companies have benefited from the pandemic, which has created unprecedented demand for devices used for remote working and schooling.
Positive vaccine results would speed up the global economic recovery and boost IPO activity, Tu said.
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