, Singapore

Asian IPO deals nearly halved in 1Q13

Badly hurt by closure of Chinese exchanges.

According to Ernst & Young, deal activity in Asia continues to be impacted by the closure of Mainland Chinese exchanges to new listings since November 2012. This resulted in no new IPO activity on China exchanges in the first half of 2013.

Comparing the first half of 2013 (111 deals which raised US$16b) with the same period last year (209 deals, US$23.7b), the amount of capital raised decreased by 33% and deal numbers by 47%.

However, there was a total of 44 deals across Asia in Q2 2013 raising US$10.5b accounting for 31% of global funds raised. An additional 20 IPOs to be completed before the end of June should raise an additional US$7.1b if successful.

Asian deals featured prominently in Q2 2013 top 10, accounting for 5 of the deals. The largest was the listing of BTS Rail Mass Transit Growth Infrastructure Fund in Thailand in April for US$2.1b, followed by Sinopec Engineering, which listed for US $1.8b in Hong Kong ? priced at the bottom of its expected range. With proceeds of US$1.1b, China Galaxy also priced at the bottom of its range.

The resurgence of the Japanese market was underlined by the flotation of Nomura Real Estate Master Fund Inc for US$1.7b on the Tokyo Stock Exchange.

“Although Asian volumes have recovered, we are not interpreting this as a bounce back, until China reopens its IPO market in the second half of 2013 and asset values stabilize at previous robust levels.

We are seeing an increase in IPO activity on the Hong Kong and Japanese exchanges, as well as from ASEAN markets such as Thailand, Singapore, Malaysia and to an extent Indonesia, due to more positive sentiment,” says Max Loh, Managing Partner, Singapore and Asean at Ernst & Young.

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