HONG KONG • Share sales in Asia ex-Japan are set to rebound next year from three-year lows this year, driven by listings of financial firms in Greater China, including the world's biggest fintech IPO, and a further revival of offerings in India, bankers and investors said.
An up to US$5 billion (S$7.22 billion) listing from China's largest peer-to-peer lender Lufax, and potential IPOs from e-commerce giant Alibaba's online finance arm and Sinopec Marketing in Hong Kong are expected to help reverse this year's 22.5 per cent slide in Asia-Pacific equity capital market (ECM) deals.
Deal flow is expected to get a boost from mainland China's recent move to relax approvals for IPOs to help control the rapid build-up in corporate debt there and cushion its slowing economy.
ECM activity in Asia-Pacific dropped this year as weak IPO performance curbed demand for new listings in the region and listed companies slashed secondary offerings because of volatile markets. The US$207.4 billion of equity offerings were the lowest since the US$159 billion raised in 2013, preliminary Thomson Reuters data showed.
Follow-on share sales sank 29.3 per cent, far outpacing the 2.4 per cent decline in IPOs, according to data through Dec 28.
Hong Kong, the world's top venue for IPOs for a second straight year, is forecast to have about US$26 billion of new listings next year, higher than the US$25 billion this year, accounting firm EY estimates.
Potential large listings in the city next year include those of Lufax and Alibaba arm Ant Financial, which was last valued at US$60 billion. Either of those IPOs would be the largest by a financial technology company globally.
Chinese start-ups that have raised billions of dollars and experienced fast growth over the past several years are also lining up IPOs either next year or in 2018.
Financial services companies that dominated Asian equity offerings this year will continue the trend next year, bankers and analysts said. Likely Hong Kong IPOs include Guangzhou Rural Commercial Bank's up to US$1.5 billion deal, an up to $1 billion IPO from China United Insurance Holding Corp and Ping An Securities' up to $1 billion deal.
Elsewhere in the region, South Korea is expected to have a strong year for new listings, with mobile gaming company Netmarble Games looking to raise US$1.8 billion and Lotte Group likely reviving the US$4.5 billion IPO of Hotel Lotte. In Singapore, NetLink Trust, the broadband subsidiary of Singtel, could raise up to US$2.5 billion.
With about US$4 billion worth of deals, India had its best year for IPOs this year since a US$8.4 billion record set in 2010. Next year, bankers expect another positive showing, despite Prime Minister Narendra Modi's recent outlawing of high-value currency notes, or demonetisation. Likely deals include an up to US$1 billion listing from National Stock Exchange and US$440 million from toll road owner Reliance Infrastructure.