Thu, Jan 03, 2019 - Page 12 News List

IPO activity might soften due to US-China squabble

By Crystal Hsu  /  Staff reporter

The nation’s initial public offering (IPO) activity might soften a bit this year, after staging a strong pickup last year, as trade tensions continue to weigh on the economy and rock global capital markets, international consultancies said yesterday.

There might be 50 to 60 IPOs this year, compared with 60 last year, as more biotechnology firms and machinery manufacturers might seek to list on local bourses to boost their operations and financial health, PricewaterhouseCoopers Taiwan (PwC) said.

The two sectors would continue to benefit from the government’s efforts to boost the “five plus two” industries and seek funding to grow their business scale, PwC market and business development leader Kevin Lin (林鈞堯) said.

Machinery manufacturers also have to deal with succession issues, as their first-generation entrepreneurs grow old and the introduction of professional managers appears a good option to keep companies thriving, Lin said.

Younger generations are more receptive to IPOs that require more transparency and accountability on the part of listed firms, although it would dilute family control over their business, Lin said.

Capital markets across the world put up a strong showing in the first half of last year, but slowed noticeably in the third quarter, as trade tensions between the US and China flared up, PwC said.

The issue poses the biggest downside risks for IPO activity this year, as solutions remain evasive thus far, Lin said.

Seven firms have applied for a listing on Taiwan Stock Exchange and another 14 on Taipei Exchange, Ernst & Young Taiwan (EY) said.

Taiwan might prove an attractive IPO destination for firms seeking to avoid the US-China trade dispute, EY managing partner Lin Tu (涂嘉玲) said.

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