HONG KONG: New share issues from Asia-Pacific outside of Japan fell nearly 29% in the first half of 2003, but they are expected to gather pace in the second half as investor fears over SARS (Severe Acute Respiratory Syndrome) fade and travel restrictions on investment bankers are lifted.
Companies in Asia-Pacific outside of Japan raised US$5bil through initial public offerings (IPOs) in the first half of the year against US$7bil in the same period in 2002, according to data from Thomson Financial.
British insurer Royal & Sun Alliance staged the biggest IPO in the world so far this year when it spun off Australian unit Promina Group Ltd in May, raising US$1.2bil.
Chinese freight forwarder Sinotrans Ltd raised about US$502mil in February, while Singapore Telecommunications Ltd raised S$684mil by floating Singapore Post in May.
Bankers and fund managers say the bulk of the US$5bil in IPOs from the Asia-Pacific region came from outside China – which had been the region's biggest IPO market outside of Japan in the past couple of years – as the outbreak of the deadly SARS stalled new share sales in North Asia.
But as investor concerns over SARS subside, travel restrictions on Hong Kong and China are lifted and regional equity markets rally, there is growing optimism among bankers and investors that more companies are going to raise funds by listing their shares.
Analysts say that if the regional stock markets hold up well, Asian companies could raise US$6bil–US$7bil in new equity during the second half of 2003.With many Chinese state-owned companies eager to list as part of the government's economic reform programme and an increasing number of private firms seeking capital, China will remain the main source for IPOs in the next six to 12 months.People's Insurance Company of China (PICC), China Life Insurance Co and Ping An Insurance Co are all eyeing IPOs within a year that they hope will raise a combined US$5.6bil.Lianhua Supermarket Holdings Co Ltd, China's largest supermarket chain, last week raised US$74.5mil to expand its retail network and upgrade computer systems.
China's largest airline, China Southern, plans to raise US$362mil through a listing on the Shanghai exchange in early July.
The infrastructure arm of Hong Kong conglomerate Hopewell Holdings Ltd is eyeing an IPO on Aug 6 to raise up to US$500mil, a banker close to the deal said yesterday.
In other Asian markets, analysts say new share sales will be led by governments selling off businesses bought during the 1997–98 regional financial crisis. Indonesia will raise US$328mil from the IPO of its largest bank, Bank Mandiri, marking the country's biggest new share issue since the Asian financial crisis. – Reuters