IPO proceeds in Asia-Pacific fall 70% in Q1 to US$12.7 billion: EY
PROCEEDS from initial public offerings (IPOs) in Asia-Pacific fell 70 per cent to US$12.7 billion in the first quarter of 2023, as the number of deals dropped 6 per cent to 175.
Notably, IPO activity in the China and Hong Kong markets was quieter than usual even as pandemic control measures ease, noted EY in report findings released on Wednesday (Apr 5).
“Overall, Asia-Pacific took a ‘wait-and-see’ attitude, as investors keep their powder dry and look for further indicators of market recovery,” the professional services firm said.
That being said, Asia-Pacific IPO deals continued to dominate globally, accounting for 59 per cent of global IPO deals, with China representing more than 40 per cent of all global proceeds.
IPO activity in South-east Asia was more encouraging. The number of IPO deals in the region rose 75 per cent to 51 deals, netting US$1.4 billion in proceeds – which was 40 per cent higher than the same period a year earlier.
Indonesia was the most active in the quarter, raising US$828 million across 30 IPOs. Thailand followed with 10 IPOs raising US$322 million, Malaysia with 10 IPOs raising US$238 million, and Singapore with US$15 million via one IPO.
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Globally, the number of IPOs fell 8 per cent year on year to 299, with proceeds declining 61 per cent to US$21.5 billion.
Technology companies, which have been drivers of IPO activity in recent years, saw a sharp decline in valuations. Although the sector continued to lead in terms of IPO volume, four out of the top 10 listings in Q1 came from the energy sector.
Special purpose acquisition company (Spac) IPOs hit a six-year low in terms of deal volume. Proceeds raised also dropped to levels unseen since 2016, as high liquidation and poor post-listing performance of de-Spac transactions pared investor demand for new IPOs, EY noted.
“Amid persistent macroeconomic and geopolitical uncertainty, exacerbated by stress in the global banking system, IPO windows are fleeting and funding conditions are getting tougher, with investors prioritising value over growth,” said EY global leader Paul Go.
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