Asia has had its best third quarter on record for initial public offerings (IPOs), even with Hong Kong turning quiet as many firms put listing plans in the regional powerhouse on hold amid China’s sweeping regulatory clampdown.
Thanks to blockbuster deals in markets like South Korea and India, first-time share sales in the region raised US$56 billion in the three months through Thursday, the most ever for such a period, data compiled by Bloomberg show.
“Activity will continue — 2021 remains an extraordinary year for equity capital markets volume,” said William Smiley, cohead of Asia ex-Japan equity capital markets at Goldman Sachs Group Inc. “Global investors still want access to Asian growth.”
Photo: Bloomberg
Asia’s record third-quarter came despite the slowdown in Hong Kong, one of the world’s busiest listing venues.
As Beijing broadened its efforts to rein in corporations and align business models with Chinese President Xi Jinping’s (習近平) “common prosperity” campaign, about US$1 trillion was wiped off the value of Chinese stocks globally in July and Hong Kong’s stock benchmark sank into a bear market in August.
That saw listing volumes in the financial hub dip to US$6 billion in the third quarter, trailing South Korea for the first time in four years.
It was also the lowest quarterly IPO haul for Hong Kong since the start of last year, when the COVID-19 pandemic was taking hold and equity capital markets ground to a halt.
Share performance also suffered. Firms that listed in Hong Kong in the third quarter and raised at least US$100 million saw their stocks climb just 2.8 percent from their offer prices on average, according to data compiled by Bloomberg.
That is versus 20 percent in South Korea and 25 percent in India, both of which saw big increases in volumes compared with the first two quarters.
“Following a very strong first half for the Street, we are still seeing good activity levels for the remainder of this year albeit at a slower pace,” said Magnus Andersson, cohead of Asia Pacific equity capital markets at Morgan Stanley. “We expect to have a healthy pipeline as we enter next year.”
IPOs by the likes of game developer Krafton Inc and online-only bank KakaoBank Corp pushed third-quarter volumes to US$10.4 billion in South Korea, about four times what was fetched in each of the previous two quarters.
Similarly, in India, food-delivery start-up Zomato Ltd raised US$1.3 billion in July.
Many more listings are lined up for the final quarter, starting with digital payments company Paytm, which has filed to raise as much as 166 billion rupees (US$2.24 billion) in what would be the nation’s biggest IPO ever.
“India now has a savvy, tech-educated population with good Internet penetration,” said Anvita Arora, cohead of Asia Pacific equity capital markets at Bank of America Corp. “The combination of factors for tech success is there. In general the tech pipeline is very strong.”
While Shanghai pulled off the biggest third-quarter deal in Asia with China Telecom Corp’s (中國電信) bumper offer, few bankers expect a heavy pipeline of Chinese listing candidates to come back soon.
That is owing to the continued uncertainty on the regulatory front and as issuers await new rules on overseas IPOs.
Chinese firms that had initially eyed Hong Kong or US listings might opt to raise money privately instead as they wait for the clouds to clear.
Even with the slowdown in Hong Kong, first-time share sales in Asia have raised US$140.5 billion so far this year, more than the same period in any other year, Bloomberg-compiled data show.
While IPOs by Chinese issuers might slow down over the next three months, listed companies are still raising funds.
London-based insurer Prudential PLC fetched US$2.4 billion in a Hong Kong share sale last month in one of the territory’s biggest follow-on offerings of the year.
The complexion of transactions in Asia would differ from last year, and a more thoughtful approach to price, size and structure might be needed, but deals will keep being done, Smiley said.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS