Global IPO proceeds up 28% in Q1

Huami Corporation chief executive Wang Huang ringing a ceremonial bell to celebrate his company's IPO at the New York Stock Exchange last month.
Huami Corporation chief executive Wang Huang ringing a ceremonial bell to celebrate his company's IPO at the New York Stock Exchange last month.PHOTO: REUTERS

Global initial public offering (IPO) activity in the first quarter of the year raised US$42.8 billion (S$56 billion) from 287 deals, according to Ernst & Young's (EY) quarterly report on global IPOs released yesterday.

The proceeds raised represented a 28 per cent increase over the first quarter of last year despite a 27 per cent decrease in the number of deals done.

Said Mr Martin Steinbach, EY global and Europe, Middle East, India and Africa IPO leader: "Global growth in IPO proceeds outpaced deal numbers in a relatively strong first quarter. Driven by larger transactions, global IPO activity started out with a strong increase in proceeds in what is traditionally the slowest quarter of the year, despite a decline in deal numbers."

He added: "However, market volatility in February did slightly dampen investor confidence, slowing momentum gained from calendar year 2017, the highest performing 12-month period since 2007."

Across the Asia-Pacific (Apac) region, IPO deal activity declined in the first quarter with 157 deals, a 39 per cent fall from the period a year ago, and the lowest quarterly total since the second quarter of 2016.

Meanwhile, total proceeds for the quarter stood at US$11.4 billion, down 26 per cent over the same period last year; the lowest level since the first quarter of 2016.

Even though the Asia-Pacific experienced a drop in IPO activity, it remained the world's busiest region for new listings in the first quarter of this year; in part because of activity in South-east Asia, EY said.

Mr Max Loh, EY's Asean and Singapore managing partner, said: "IPO activity in Apac in Q1 2018 was defined by the slower pace of mainland China IPOs due to greater regulatory scrutiny and a slowdown in various markets."

South-east Asian stock exchanges hosted 18 IPOs in the first quarter of the year, a 20 per cent increase in deals over the same period last year. This growth was driven mainly by IPOs on the junior boards of stock exchanges in South-east Asia, which had nine IPOs this quarter compared with six in the same period last year.

But while the total number of deals grew, proceeds raised through IPOs on stock exchanges in South-east Asia declined to US$661 million in the first quarter of the year, from US$1.15 billion in the same quarter last year.

Among exchanges in Asean, the Stock Exchange of Thailand held the top spot among markets with six IPOs raising US$373 million, while Vietnam's Ho Chi Minh Stock Exchange raised US$184 million from the HDBank IPO.

In Singapore, Timber bedroom furniture maker LY Corporation's debut on the Singapore Exchange's Catalist board on Jan 31 was the sole IPO listing between the start of the year and March 14, the cut off date for IPOs listed in EY's report. European social-trading broker Ayondo's debut on the Catalist board on Monday was Singapore's other IPO listing in the first quarter.

"Asean IPO markets were active in Q1 2018 as we saw the largest number of deals quarter-on-quarter since 2014. The pipeline for IPOs across Asean in 2018 looks fuller than in 2017, boosted by strong economic fundamentals in these markets," Mr Loh said.

However, he cautioned that "exchanges will need to brace themselves for headwinds from geopolitical risks; availability of alternative sources of funding such as private equity and crowdfunding; and uncertainties around trade policies and reforms".

That said, three Singapore-based companies had cross-border IPOs within the Asia-Pacific region in January.

The trio of asset management firm ZACD Group, communication system development services provider ISP Global and plastic product manufacturer IAG Holdings are all listed on the Hong Kong Stock Exchange's small-cap board, the Growth Enterprise Market.


Correction note: An earlier version of the article cited European social-trading broker Ayondo's debut on the Singapore Exchange's Catalist board as the sole IPO listing in the first quarter. This is incorrect and the sole IPO is LY Corporation's listing on the Catalist board. As the report had a cut-off date on IPOs on March 14, Ayondo's IPO was not included in the findings of the report. We are sorry for the error.

A version of this article appeared in the print edition of The Straits Times on March 30, 2018, with the headline 'Global IPO proceeds up 28% in Q1'. Print Edition | Subscribe