By Sandeep Bishnoi | Oct 20, 2024 | Category: News
Asian stock markets brace for their busiest week of listings in over two years, with 20 companies expected to raise $8.3 billion. Investor excitement returns as companies rush to IPO before the US election.
Key Points:
- Asian stock markets prepare for the busiest IPO week in more than two years.
- 20 companies from Asia Pacific are set to list, potentially raising $8.3 billion.
- China, India, and Japan lead the revival of IPO activity in the region.
- High-profile IPOs include China Resources Beverage and Horizon Robotics.
- India’s Hyundai Motor IPO, the largest ever in the country, draws mixed interest.
- Tokyo Metro’s $2.3 billion IPO will be Japan’s biggest since 2018.
- Korea’s K Bank cancels its IPO due to weak demand.
Blockbuster Week for Asian Stock Markets as IPOs Surge Amid ‘Animal Spirits’
In what could be a historic week for Asian stock markets, around 20 companies from the Asia-Pacific region are gearing up to list shares, aiming to raise as much as $8.3 billion. This marks the busiest week of listings in over two years, signaling a significant revival in investor confidence and market activity.
The surge in initial public offerings (IPOs) is driven by companies seeking to capitalize on the current market momentum and complete their deals before the upcoming US election on November 5. This flurry of activity comes at a crucial time as markets in Asia have struggled with weak performance in recent years.
A Revival Across Asia: China, India, and Japan Lead the Charge
With major IPOs lined up from China, India, and Japan, the week is set to test investor demand across the region. China Resources Beverage Holdings Co., a bottled-water maker, and Horizon Robotics Inc., an autonomous-driving technology firm, are among the high-profile companies debuting on the Hong Kong Stock Exchange. Together, they aim to raise more than $1.3 billion, potentially sparking a broader revival in Hong Kong’s once-bustling IPO market.
“There is a level of animal spirits returning to the Asia market,” said Matthew Emsley, a partner at Herbert Smith Freehills LLP, a law firm specializing in IPOs. “There’s increased activity and urgency to take advantage of that positivity.”
Market observers will closely watch the performance of these new listings, as a successful week could encourage more companies to follow suit. However, the current boom also presents risks, as a lack of sustained investor interest could stall this recovery.
India’s Hyundai IPO: A Mixed Reaction
In India, Hyundai Motor India Ltd. is set to make its trading debut on Tuesday, following the country’s largest-ever IPO, which raised $3.3 billion. While the deal was oversubscribed more than two times, there are concerns about the auto industry’s sluggish performance. Small investors, in particular, showed lukewarm interest in the IPO, reflecting growing caution in the sector.
“The entire sector doesn’t look very promising currently,” said Keshav Gupta, a 25-year-old investor who chose to skip the Hyundai IPO due to concerns over the industry’s future.
Despite the cooling demand for cars, Hyundai’s IPO is part of a broader surge in Indian listings. With this IPO, India’s capital markets will have raised more than $12 billion so far this year, a notable recovery from the lows of the past two years but still below the record $17.8 billion raised in 2021.
Japan’s Big IPO Week
Japan will also see significant IPO activity, with Tokyo Metro Co. preparing for a $2.3 billion listing, the country’s largest since 2018. The listing comes at a time of uncertainty for Japan’s markets, with the yen depreciating to a 32-year low, triggering speculation over potential policy shifts following the appointment of a new prime minister.
Adding to Japan’s IPO frenzy, Rigaku Holdings Corp., a leader in X-ray technology, will cap off the week with its own $750 million IPO.
Risks and Cancellations
Not all companies are pressing ahead with their IPO plans. Korea’s online lender K Bank Co. recently canceled its $700 million IPO, citing a lack of demand. This highlights the mixed appetite for new listings in some parts of the region.
Nevertheless, the overall atmosphere remains positive, and analysts are optimistic that a successful week could signal the start of a sustained recovery in Asia’s IPO market.
Conclusion
As ‘animal spirits’ return to Asia’s stock markets, investors are eager to see if this blockbuster week of IPOs will live up to expectations. With major deals across China, India, and Japan, the next few days will provide crucial insights into the region’s equity markets, setting the tone for the rest of the year. Investors will be watching closely to determine whether this revival is a short-lived surge or the beginning of a more stable period for IPOs in Asia.
Key Takeaways:
- Asian markets are experiencing a resurgence in IPOs after years of weak activity.
- China, India, and Japan are leading the IPO revival, with several high-profile listings.
- Success this week could spark further IPOs across the region.
- Some sectors, such as India’s auto industry, face uncertainty, which may temper enthusiasm.
