The number of initial public offerings (IPO) could rise modestly from 35 this year to 40 next year, led by technology firms seeking to raise capital in the local bourse, Deloitte & Touche Taiwan said yesterday.
Companies that postponed listing this year due to concerns over the US-China trade dispute might take action and raise between NT$16 billion and NT$20 billion (US$529.22 million and US$661.53 million) in capital, the local branch of the international accounting firm said.
“We are cautiously optimistic about the IPO market ahead,” Deloitte Taiwan chief executive officer Casey Lai (賴冠仲) said.
Trade tensions, while subsiding, might linger for another three to five years, weighing on market sentiment, Lai said.
Other economic and political uncertainties could pose a challenge to local IPO activity, including presidential elections in Taiwan and the US, negative interest rates in Europe and the unrest in Hong Kong, he said.
Weak sentiment accounted for the lackluster showing this year, with only 35 IPO deals, way lower than the company’s forecast of 60.
Aside from the trade dispute, a global economic slowdown, geopolitical risks and growing competition from China dampened local IPO activity this year, Lai said.
Despite these drawbacks, capital raised this year surged to a five-year high of NT$28 billion, with the top five deals accounting for 65 percent of the total, Deloitte Taiwan managing partner Kenny Hong (洪國田) said.
The results indicated the return of major participants, Hong said.
It was led by Hotai Finance Co (和潤企業), the vehicle loan and insurance service unit of Hotai Motor Co (和泰汽車), which raised NT$9.15 billion; followed by Wiwynn Corp (緯穎), a subsidiary of computer maker Wistron Corp (緯創), with NT$5.96 billion; and Pegavision Corp (晶碩) with NT$1.67 billion.
The tallies showed that the local IPO market gained headway in terms of fundraising, despite a decline in the number of deals, Hong said.
On average, individual deals raised NT$800 million each, more than double the average of NT$390 million a year earlier, Hong said.
Technology companies are likely to continue to dominate the market in the coming year, as Taiwan is home to the world’s major suppliers of key electronic components, Hong said.
The TAIEX would lend support, as it has stood firm above 11,000 points for months, aided by top technology firms’ strong fundamentals, Deloitte Taiwan said.
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