Funds raised from initial public offerings (IPOs) in Taiwan fell more than 30 percent annually last year, although the number of new listings on the local equity market rose slightly, according to PricewaterhouseCoopers (PwC) Taiwan.
In a report released on Tuesday last week, the accounting and consulting firm said NT$25.5 billion (US$797 million) was raised by IPOs on the local main board and the over-the-counter (OTC) market last year, a 32 percent annual decline.
Meanwhile, the number of companies that listed their shares for the first time on the main board and the OTC market last year was 60, two more than in 2015, PwC said.
The drop in the funds raised from IPOs last year was caused by newly listed companies often being small and medium-sized firms in the high-tech sector or in the cultural creative industry, the firm said.
Due to their relatively small paid-in capital, only four of the 60 newly listed companies raised more than NT$1 billion each, which pushed down the aggregate total last year, the firm said.
PwC said the performance of the new listings on the local equity market last year was the worst in five years, with 71 percent of them failing to gain 2 percent during the year.
The data defied conventional wisdom that new listings would soar largely because of the so-called honeymoon effect.
The capital market in Taiwan has been shrinking and lagging behind its neighbors in terms of IPO funds, PwC said, citing Hong Kong as an example, which raised US$25.11 billion last year, and Shanghai which raised US$15.12 billion.
Taiwan was not the only market that saw a drop in IPO funds last year, Securities and Futures Bureau deputy director Sam Chang (張振山) said.
Bureau data show that funds raised from IPOs in Taiwan in the first nine months of last year fell 48.25 percent from a year earlier, while in Hong Kong and Japan the drop was 64 percent and 54 percent respectively, Chang said.
Meanwhile, the number of firms launching IPOs could range between 55 and 60 this year, with biotech and high-tech firms dominating the new listings, PwC said.
In light of the government’s “new southbound policy,” companies in Southeast Asia are likely to launch IPOs in Taiwan’s capital market this year, the firm said.
Separately, Macquarie Capital Ltd has forecast that the TAIEX will challenge the 9,500-point mark this year, with the semiconductor sector driving the gains.
In a research note issued on Tuesday last week, the Australian brokerage said that after two consecutive years of consolidation, Taiwan’s integrated circuit industry will start gaining momentum this year and sales in the domestic semiconductor sector are likely to increase by 9 percent year-on-year on a cyclical uptrend in the memory chip business.
“We expect moderate upside to the TAIEX in 2017 driven by out performance in memory, semiconductors, automation, auto electronics, financials and defensive non-tech stocks,” Macquarie said in the note. “We remain negative on the LCD, PC, textile and footware sectors.”
The TAIEX closed at 9,372.22 points on Friday last week.
While the brokerage has forecast a rise in share prices in Taiwan this year, it has also cautioned that an interest rate hike cycle in the US and trade policy of US president-elect Donald Trump could cause volatility in the global financial markets.
The key risks for Taiwan are specifically politically focused, such as its relationship with China, it added.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
PROJECTION: TSMC said it expects strong growth this year, with revenue in US dollars projected to grow by about 30 percent, outperforming the industry Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported consolidated sales last month reached NT$317.66 billion (US$9.98 billion), the highest ever for the month of February, driven by robust demand for chips built using the company’s advanced 3-nanometer (3nm) process. Last month’s figure was up 22.2 percent from a year earlier, but fell 20.8 percent from January, the world’s largest contract chipmaker said in a statement. For the first two months of the year, TSMC posted cumulative sales of NT$718.91 billion, up 29.9 percent from a year earlier. Analysts attributed the growth to sustained global demand for artificial intelligence (AI) products
RSS