20 October 2018
Ernst & Young Asia-Pacific IPO leader Ringo Choi (left) and assurance partner Jacky Lai tally up the totals from first-half IPOs. Photo: EY
Ernst & Young Asia-Pacific IPO leader Ringo Choi (left) and assurance partner Jacky Lai tally up the totals from first-half IPOs. Photo: EY

Asia-Pacific IPO fundraising up 45% in 1H

Debuts in the Asia-Pacific region raised US$33.7 billion in the first half, up 45 percent from the same time last year, as the number of initial public offerings increased 64 percent to 217, Ernst & Young said Monday.

Four of the 20 biggest IPOs in the world were on Asian exchanges — three in Hong Kong and one in Tokyo. But activity was greater in the first quarter than in the second, the accounting firm said.

“After a bumper start to the year with the reopening of mainland China’s exchanges to new listings, activity slowed due to approvals again being placed on hold for most of the second quarter,” Ernst & Young assurance partner Jacky Lai said.

“But with a further 100 Chinese companies now expected to list this year and solid investor confidence across a range of markets including Hong Kong, Japan and Australia, the stage is set for considerable, albeit constrained, IPO activity in the second half of the year.” 

The company expects a significant pickup worldwide in the second half as financial, real estate, health care, technology and consumer products and services sectors get a lift on rising consumer confidence.

Ringo Choi, Ernst & Young’s Asia-Pacific IPO leader, said: “We expect the global IPO market to be characterized by a period of normalization. As economic recovery continues in many markets, equity indices remain buoyant and volatility is trending downward, the fundamentals are in place for a sustained period of strong and steady IPO activity.”

Choi said investors have been bolstered by the “relatively strong” post-IPO performance of recent debuting companies compared with general returns in the equity markets.

“[But] with a solid pipeline of IPO-ready businesses across a broad range of geographic markets and from multiple sectors, there is no shortage of supply. This will increase the pressure on pricing as investors will be wary of meeting over-optimistic valuations,” he said.

In the first half, the global IPO market raised US$117.7 billion, up 67 percent from the same period last year and the highest first-half total since 2007. The number of deals climbed 60 percent to 588. 

Activity was spread broadly across sectors, with health care the most active at 103 IPOs, more than double the volume in the same period in 2013. Technology IPOs doubled in number to 78, while energy raised the most capital in the half, bringing in US$17.6 billion.

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