Asia Pacific’s IPO market continues rebound but risks slowdown

05 October 2021 Consultancy.asia 3 min. read
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The global IPO market is poised to book a record-breaking performance this year, according market analysis by EY. The Asia Pacific region however risks falling behind in its rebound pace, mainly due to geopolitical tensions.

Across all corners of the globe, both the number of IPOs and the proceeds of stock listings have this year already surpassed 2020 figures, with the year-to-date total now at 1,635 IPOs raising US$330.7 billion. 

A key driver of activity in the third quarter was the rebound of IPO markets in Europe, Middle East, India and Africa (EMEIA), particularly Europe, India and Tel Aviv exchanges, as well as IPO candidates racing to raise capital before expected tapering begins. In the Americas, the traditional IPO market has continued at an accelerated pace, with 409 IPOs raising US$133.6 billion.

Global IPO activities by IPO proceeds

The Asia-Pacific region continues to be active, producing 750 IPOs raising US$123.4 billion year-to-date. 

Greater China continued to see gains year-to-date, with 444 IPOs raising US$94.1 billion by proceeds, a 13% and 20% respective increase. While activity continues to increase, the market experienced a complete halt of cross-border IPOs from China into the US market during this quarter, impacting both the Asia-Pacific region and the Americas.

IPO activity by geography

Japan experienced a 50% increase in IPOs (81) and a 195% increase by proceeds (US$4.0 billion) through the third quarter. This acceleration is owed to high liquidity, strong local stock market performance and improving sentiment in part due to the successful hosting of the 2020 Tokyo Olympics, said EY’s report. 

In Q3 2021, exchanges in ASEAN remained steady, with 35 deals raising US$3.4 billion compared to 33 deals raising US$1.1 billion over the same period in 2020. Across the region, the Indonesia Stock Exchange was the most active, with 15 deals raising US$1.7 billion; followed by exchanges in Thailand (9 deals raising US$383 million); Malaysia (7 deals raising US$387 million); Philippines (3 deals raising US$925 million); and Singapore (1 deal raising US$6 million). 

While the Asia Pacific region maintained steady momentum in the third quarter, the region may soon according to EY’s experts “experience a slowdown due to geopolitical tensions and ongoing volatility that is expected to continue,” said Max Loh, EY Singapore Managing Partner and ASEAN IPO Leader.

Top 12 stock exchanges by IPO proceeds

“In Asia Pacific, after many quarters of robust IPO activity, there are some signs of a temporary falloff in terms of IPO numbers and proceeds raised. Some of the factors include geopolitical tensions between the US and China, the resurging Covid-19 pandemic and regulatory action across the region, which may stymie growth.” 

Paul Go, EY’s Global IPO Leader commented: “As we head into the last quarter and market uncertainties and volatility continue to intensify, it is important to be well prepared, consider alternatives to the traditional IPO route and be realistic on valuation to ensure success.”