HONG KONG: Asian companies accounted for almost half of the global stock offering haul in the first half of this year, with the three biggest deals all coming from the region as second listings by Chinese firms boosted volumes.
Companies in Asia raised US$46.2bil through initial share sales in the first six months of 2020, representing 49% of the US$93.9bil fetched globally, data compiled by Bloomberg showed. That’s the highest proportion for the first half of a year in the last decade, the data showed, underscoring Asia’s rising share of equity capital markets activity.
Chinese companies accounted for most of Asia’s listings in the second quarter, as the world’s second-largest economy emerged from the coronavirus pandemic sooner than other parts of the world. The growing trend of US-traded Chinese firms seeking to list closer to home amid rising global trade tensions also contributed to the heightened activity.
“The response to Covid-19 in Asia and the quick actions taken helped underpin investor confidence, ” said Kenneth Chow, co-head equity capital markets Asia at Citigroup Inc. “We’re seeing a stream of health-care and biotech companies getting listed in Hong Kong. The valuations have gone up so they’re coming to the market.”
Biotech firms were some of the only companies completing IPOs when the equity market was slumping in March, with the sector emerging as winners from the pandemic driven by higher demand for health care. Asian health-care, pharmaceutical and biotech firms already raised US$8.6bil through listings in the first half, almost as much as what was fetched in all of 2019.
Boosting Asia’s share of global listing volumes is also the fact that European and US companies raised less money through initial share sales than a year ago as economies there were pummeled by strict lockdowns. First-time share sales by European companies slumped 50% in the first half, while those by American firms declined 13%, Bloomberg-compiled data showed. Conversely, Asian firms raised 54% more than last year through initial public offerings and second listings.
Globally, the top three listings of the first half were all by Chinese companies. JD.com Inc was the largest, raising US$4.46bil in its Hong Kong share sale. It’s followed by Beijing-Shanghai High Speed Railway Co, which fetched US$4.34bil on Shanghai’s Nasdaq-style STAR board in January. — Bloomberg
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