The number of initial public offerings (IPO) this year might total 60, with the amount of capital raised likely to reach NT$24 billion (US$842.67 million), as the local bourse gains traction amid an improving global economy, Deloitte Taiwan said yesterday.
The projected number of IPOs would be a more than twofold improvement on last year’s decade low of 29, as the COVID-19 pandemic dampened corporate confidence and pushed back IPO activity, Deloitte Taiwan managing partner Kenny Hong (洪國田) said.
“The number of IPO deals last year could have reached 50 if there had been no virus outbreak and no US-China trade tensions,” Hong told a news conference in Taipei on the development and outlook of the local capital market.
Photo courtesy of Deloitte Taiwan
This year, 31 firms have filed applications, while last year’s 29 firms have raised NT$14.7 billion in funding, a 50 percent decline from 2019, Hong said.
However, this meant that individual firms raised NT$500 million to NT$800 million, better than the three-year average from 2016 to 2018, Hong said.
Monetary easing by major central banks worldwide is favorable for capital markets, including the TAIEX, which was ranked third globally in terms of dividend payouts, Deloitte Taiwan said.
An ongoing rally on the local bourse would support fund-raising activity by elevating price-to-earnings ratios for many firms, TAIEX data indicated.
Share prices in Taiwan Semiconductor Manufacturing Co (台積電), the world’s largest contract chipmaker, surged more than 60 percent last year, while United Microelectronics Corp (聯電), the world’s No. 4 contract chipmaker, more than doubled.
Tech dominated the local IPO market last year, but Pan German Universal Motors Ltd (汎德永業汽車), which distributes BMW, Porsche and Mini vehicles locally, finished first by raising NT$2.3 billion, accounting for 16 percent of the total capital raised, Deloitte Taiwan said.
Proximity sensor maker Sensortek Technology Corp (昇佳電子) emerged a close second with NT$2.14 billion, accounting for 15 percent, it added.
Deloitte Taiwan expects tech firms to be the main participants this year, as Taiwan is home to the world’s major contract electronics suppliers, Hong said, adding that several companies have already filed listing applications and are due to make a debut later this year.
Local companies assign more importance to their environmental, social and governance awareness and showings, in line with an evident global trend, as earning ability can no longer be the sole measure of a good company, Hong said.
US-China trade tensions would continue to shape the global economic landscape and all eyes are focused on how US president-elect Joe Biden would handle the dispute, Deloitte Taiwan chief executive officer Casey Lai (賴冠仲) said.
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