The global market for initial public offerings (IPOs) is showing signs of life as a rebound in the stock market has emboldened companies to test investor appetite for new listings, particularly in Asia.
However, a full-fledged recovery looks distant.
IPOs totaling about US$25 billion were launched last month and this month, nearly twice the amount seen in the first two months of the year, when listings virtually ground to a halt.
Photo: AP
Issuers from Hong Kong to Italy saw a window of opportunity with the decline in market volatility, analysts said.
Activity was particularly buoyant in Asia, where regional exchanges accounted for nearly 80 percent of new share sales this month. Listings in Europe also picked up.
However, concern about a recession has deterred US issuers, slowing a full-fledged recovery. Average deal sizes were smaller, and the money raised so far this year remains 51 percent below the same period last year.
“We are beginning to see green shoots of activity with companies restarting processes that were on hold, but there is still a fair degree of uncertainty in the market,” said Jason Manketo, global cohead of law firm Linklaters LLP’s equities practice. “The buy side is keen to see results for a couple of quarters before committing to an IPO. This means the potential pipeline of some 2023 deals has been moved out to 2024.”
Drilling down into the data, Asia is handily the busiest area for offerings in the world right now, but in a key change compared with last year — when the vast majority of large deals were concentrated in China — issuance is coming from a broader swath of Asia this year.
Indonesia has been the brightest spot with a pair of nickel producers surging in their debut.
Rakuten Bank Ltd soared after raising ￥83.3 billion (US$620.9 million) in Japan’s largest IPO since 2018 — although, the pop came after the initial price range had been cut.
KKR & Co-backed Chinese liquor company ZJLD Group Inc (珍酒李渡集團) on Thursday priced Hong Kong’s largest offering this year.
“The IPO market is coming back gradually and slowly. It is not 100 percent back yet, but there are signs of life and renewed vigor,” said James Wang (王亞軍), cohead of equity capital markets at Goldman Sachs Group Inc in Asia excluding Japan.
Europe’s IPO market has been moribund, with this year’s activity down about 12 percent from the same period last year, when Russia’s invasion of Ukraine brought listings to a screeching halt.
Poor IPO returns have been a major deterrent for investors. Portfolio managers have been driving hard bargains on valuations and refusing to pay top dollar for new, unproven companies.
Meanwhile, the sudden meltdown of Credit Suisse Group AG, which ignited a global market rout last month, has added to investor worries about interest rates and inflation, further muddying listing plans.
However, there have been signs of gloom lifting. Most notably, Lottomatica SpA, an Italian gambling company backed by Apollo Global Management Inc, opened books last week for a 600 million euro (US$665.8 million) IPO, becoming the third large firm to tap European exchanges this year.
Additionally, German Web-hosting company Ionos SE and electric motor component maker EuroGroup Laminations SpA have each raised more than US$400 million, although both stocks have struggled after debuting.
Still, the outlook for IPOs in the US remains challenged. Only US$4.1 billion has been raised for companies listing on US exchanges this year, with just three — Nextracker Inc, Atlas Energy Solutions Inc and Enlight Renewable Energy Ltd — accounting for one-third of that amount.
Outside that cluster and a dozen special purpose acquisition companies that have debuted this year, the vast majority of new listings would be qualified as penny stocks.
“We’re still in an uncertain world and uncertainty is the worst thing for new issuances,” Rainmaker Securities LLC cofounder Greg Martin said.
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
At a massive shipyard in North Vancouver, Canadian workers grind metal beams for a powerful new icebreaker crucial to cementing the country’s presence in the increasingly contested arctic. Icebreakers are specialized, expensive vessels able to navigate in the frozen far north. And “this is the crown jewel,” said Eddie Schehr, vice president of production at the Seaspan shipyard. For Canadian Prime Minister Mark Carney, who heads to Norway next Friday to observe arctic defense drills involving troops from 14 NATO states, Canada’s extreme north has emerged as a strategic priority. “Canada is and forever will be an Arctic nation,” he said ahead of
Chinese entrepreneur Frank Gao used to spend long hours running his social media accounts but now outsources the chore to artificial intelligence (AI) agent tool OpenClaw, which is taking China by storm despite official warnings over cybersecurity. OpenClaw, created in November by an Austrian coder, differs from bots such as ChatGPT because it can execute real-life tasks such as sending e-mails, organizing files or even booking flight tickets. “Since January, I’ve spent hours on the lobster every day,” Gao said in an interview, referring to OpenClaw’s red crustacean mascot. “We’re family.” After downloading OpenClaw, users connect it to artificial intelligence models of their
RSS