IPOs in Asia-Pacific markets remain strong amid pandemic, says EY

In 4Q 2020, exchanges in Thailand were most active with 19 IPOs, raising US$1.9bil, followed by Malaysia (five IPOs raising US$407mil), EY said.

KUALA LUMPUR: Initial public offers (IPOs) in Asia-Pacific markets remained stronger in 2020, with industrials leading the sectors followed by technology and materials, according to EY.

It said in a recent statement despite a challenging 2020, activity in Asia-Pacific surpassed 2019, increasing by 20% (822) by volume and 45% (US$136.2bil) by proceeds in 2020.

“In fact, the region saw the highest proceeds since 2010. Industrials led the sectors with 181 IPOs raising US$20.8bil in proceeds, followed by technology with 180 IPOs and US$38.7bil in proceeds, and materials, which saw 95 IPOs raising US$7.4bil, ” it said.

EY pointed out Greater China accounted for three of the top five exchanges globally.

“With investor sentiment remaining positive in 4Q 2020, Greater China saw an acceleration in both IPO volumes and proceeds, garnering US$119.1bil via 536 IPOs in total, ” it said.

As for Japan, its startup ecosystem continued to drive growth as well in 4Q, 2020, seeing a modest 4% (93) increase in IPOs and 13% (US$3.3b) decline in proceeds through 2020.

EY said Asean exchanges recorded a steady number of listings in 4Q 2020 (34 IPOs, compared to 33 in 3Q 2020).

However, proceeds rose significantly (from US$1.1b in 3Q, 2020 to US$3.3b in 4Q, 2020), due to a rise in average deal size.

It pointed out this could signal the return of more medium-cap IPOs rather than just small-cap IPOs in 2021.

“In 4Q 2020, exchanges in Thailand were most active with 19 IPOs, raising US$1.9bil, followed by Malaysia (five IPOs raising US$407mil) and Indonesia (five IPOs raising US$25mil), Singapore (four IPOs raising US$510mil) and Philippines (one IPO raising US$522mil).

Across 2020, Asean IPO activity saw a modest decline in numbers (111, down 13%) and funds raised (US$7.7bil, down 5%) compared with 2019. However, 2020 saw two notable IPOs of US$1bil or more in the year: Central Retail Corp. plc (US$2.3bil) and SCG Packaging plc (US$1.3bil) in Thailand, ” it said.

EY Asean IPO leader Max Loh said the Asia-Pacific IPO market remained relatively resilient in 2020 in the face of the economic impact exacerbated by the Covid-19 pandemic.

“Any impact has clearly been buffered by government fiscal stimuli, low interest rates, an abundance of liquidity and the roll-out of vaccines.

“The exchanges in Greater China continued to lead the way in terms of number of IPOs and proceeds raised. Likewise, Asean exchanges recorded a steady number of IPOs with proceeds raised increasing due to larger average deal sizes.

“This augurs cautious optimism that with a faster though uneven recovery in the region in 2021, the need for companies to access capital, boost liquidity, transform and drive growth will lead to an improving IPO market both from a number and size perspective, ” Loh said.