The volume of initial public offerings in Asia (ex Japan) has dropped to the lowest level since 2005, according to Dealogic data.
For the year-to-date, volume stands at $16.2 billion, down 40% from the same period last year, which saw $27.4 billion raised.
By contrast, volumes in North America rose 4% and in Europe nearly tripled, to $34.5 billion and $14.4 billion respectively, taking global volume to $89.4 billion, up 25% from the same period in 2012.
The data for Asia (ex Japan) is hardly surprising. Even taking the summer lull into account there has been a dearth of listings this year.
Beijing’s shutdown of mainland China’s IPO market partly explains this but fears of US tapering and macro conditions in parts of the region have also created uncertainty that continues to weigh on sentiment.
“The current macro picture in India and Indonesia has been having an effect,” says Seamus Hanly, head of equity syndicate for Asia ex-Japan at Nomura. “And during the first half of the year, when credit conditions were tight, the bond market presented very attractive rates. Equities were less attractive. The picture is changing though."
For the year to date, Hong Kong accounted for $5.9 billion, or 36% of total volume, compared with $3.0 billion or 11%, in the same period last year. Singapore follows with $4.3 billion and a 26% market share.
There are, however, signs of a possible uptick.
Chinese food retailer Tenwow - backed by US private equity firm Carlyle Group - and online gaming company Forgame will begin marketing their HK IPOs to investors in coming days.
Also, some big issuers plan to tap the market after the summer. Huishang Bank has filed a listing application to the Hong Kong Stock Exchange for a $1.5 billion-$2 billion IPO, while Cinda Asset Management filed two weeks ago for an IPO of $1.5 billion. Bank of Shanghai plans to start the Hong Kong listing of its $2 billion A/H IPOs by the year end.
Meanwhile, Huishan Dairy, a mainland food company, is also expected to come to market in September with a $1 billion IPO.
Additional reporting by Jing Song
