Taiwanese initial public offerings (IPO) may see double-digit percentage growth next year after a strong rebound this year as the economy at home and abroad continue to improve, Ernst & Young said yesterday.
“Despite poor visibility, the nation’s capital markets may see a continued rebound in IPO interest next year, led by firms in the technology and biotechnology sectors,” Ernst & Young assurance partner Ian Wang (王彥鈞) told a media briefing.
Wang expects the number of IPOs to pick up by between 10 and 15 percent next year, from an estimated 32 by the end of this year, as GDP growth is set for a mild expansion and policymakers aim to introduce more deregulation to invigorate the capital markets.
Wang’s comments were in line with Taiwan Stock Exchange Corp’s (TWSE, 台灣證券交易所) forecast last week that 20 local firms and 15 foreign companies would seek to list on the main board next year.
Meanwhile, more biotechnology companies may apply to list on the GRETAI Securities Market as the government has been boosting the sector, Wang said, dismissing concerns some may apply to list in Hong Kong, the second-largest IPO market in the world this year, behind the New York Stock Exchange.
“Listing expenses are lower in Taiwan to begin with,” Wang said, adding that biotechnology firms also enjoy higher evaluations in Taiwan, as evidenced by their high price-to-earnings ratios.
In addition, the government has renewed its determination to facilitate the opening of “free economic pilot zones,” whose more favorable taxation terms and easier regulations would attract firms, Wang said.
This year, IPO deals on the Taiwan Stock Exchange are expected to hit 32 and raise a total of NT$16.72 billion, up by 45 percent and 27 percent respectively from 22 deals with overall proceeds of NT$12.19 billion last year, Ernst & Young statistics showed.
That number of IPOs this year would put Taiwan in seventh place in the world rankings after South Korea with 37 deals, Wang said, adding that the rankings do not include firms listing on the Emerging Stock Market (興櫃市場), in line with international practices.
Globally, IPOs are likely to advance 3 percent to 864 this year, the first uptick since 2010, and raise about US$163 billion, or a 27 percent increase from last year, an Ernst & Young report showed.
The figures lend support to the recovering confidence of firms and investors, a trend that is set to extend into next year, the company said.
The US market led the recovery this year in terms of both IPOs and capital raised, followed by the Greater China area, Ernst & Young said.