IPOs in the Asia-Pacific region are on pace for the worst year since 2008, as China, the world’s second-biggest economy, slows. Deals in Hong Kong, the world’s largest IPO market in 2010, have raised $3 billion this year, the lowest for any January-to-September period since 2003. In China, companies have sold $14.9 billion of shares, the lowest since 2009.
For the three months through September, companies in Asia raised $16.7 billion, compared with $13.6 billion in the same period a year ago, according to data compiled by Bloomberg. Japan Airlines, which completed an $8.4 billion IPO last month, accounted for half of the region’s quarterly volume. Companies have raised $4.4 billion in China since July 1, the lowest third-quarter tally since 2008, the data show.
In Asian markets such as Hong Kong, a string of accounting missteps involving mainland Chinese companies that were listed in recent years has sapped IPO demand. Meanwhile, Chinese central banker Zhou Xiaochuan warned in a Sept. 19 newspaper article that downward pressure on the country’s economy is still “relatively large.”
“Investors are cautious about Chinese IPOs as China’s economy slows and some scandals involving private-sector firms have affected their confidence,” said Ronald Wan, a Hong Kong- based managing director at China Merchants Securities, which oversees about $1.5 billion. A shrinking pool of state-owned companies that haven’t gone public affected the volume of IPOs in Hong Kong and China, he said.
Morgan Stanley, which led Facebook’s offering, is so far this year’s top underwriter for IPOs globally, according to data compiled by Bloomberg. Deutsche Bank AG is in second place and JPMorgan Chase & Co. is third, the data show.