By Filipe Pacheco

 

After the worst quarter in five years for Asia Pacific initial public offerings, a pick up in activity is expected from South Korea, India and Japan while Chinese deals are likely to remain sparse.

 

New share sales across the region fell to $11 billion between January and March, the lowest tally for a quarter since early 2019, data compiled by Bloomberg show. The amount represents a 46 per cent drop from the same period last year. 

While IPOs returned to major venues in Europe and the US, the slowdown in Asia was mostly due to Beijing’s decision to ramp up scrutiny of domestic new share sales as it tries to boost confidence in its equities market. Large deals in Hong Kong also vanished amid concerns about China’s economy. The city hasn’t hosted an offering larger than $1 billion since Oct. 2022.

Syngenta Group withdrew its long-delayed application for a $9 billion initial public offering in Shanghai last week, another blow to China’s equity markets after Alibaba Group Holding Ltd. scrapped the planned listing of its logistics arm.

Elsewhere in the region, new share sales set to raise several hundred million dollars are surfacing. In South Korea, marine services company HD Hyundai Marine Solution Co. and one shareholder are seeking as much as 742 billion won ($551 million) this month. Even priced at the bottom of range, it would the largest IPO in Seoul since early 2022.

India has hosted a flurry of tiny deals since the start of January, drawing scrutiny from regulators during the past month. With demand for equities in the country remaining high, offerings bigger than $100 million are expected to be taken to the market. 

A shareholder of telecom service provider Bharti Hexacom Ltd. is this week set to start selling shares in the company that may raise as much as Rs 4,280 crore ($513 million). The pipeline of expected large deals in Mumbai also includes a potential $1 billion offering by Bajaj Housing Finance Ltd. 

In Japan, a 70 per cent surge in shares of discount-store chain operator Trial Holdings Inc. since its listing on March 21 could boost sentiment for other newcomers as improving shareholder returns and corporate profits revive optimism in the local market. It’s ¥38.85 billion ($257 million) IPO was the largest in Tokyo since October. 

In Hong Kong, meanwhile, the drought in what’s traditionally been one fo the world’s busiest listing venues will probably continue as Chinese firms stay on the sidelines following the scrapping of Syngenta’s and Alibaba’s proposed deals.

First Published: Apr 01 2024 | 7:44 AM IST