Signs of life have emerged in Asian equity markets. Investors have drawn some badly needed confidence from the recent global stock market rally and issuers have worked out what sort of deals they can get done in tough market conditions. Unsurprisingly, IPO volumes have plunged in such risk-averse times. The return of the market in any meaningful size will depend largely on the broader economic outlook. Deleveraging is a priority for many companies, however, and listed ones are turning to rights issues and private placements to raise money...Read more
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With investors still reeling from their losses from mini-bonds, accumulators et al, the public market for structured products is taking a beating, especially structured equity. Traditionally a mainstay of the market, the sector has spent the past 18 months in the cellar, partly because structured equity is fundamentally a bull market product, and partly because regulators have put the brakes on new issuance.
Two of the region’s billion dollar rights issues – Maybank and Axiata– were completed in the first half of 2009, causing a stir in the otherwise quiet Malaysian market. The right issues have seen foreign houses vying for a piece of the action, but domestic banks have largely dominated the underwriting.
After months of inactivity, Indian equity markets finally sprung to life in euphoric fashion in mid-May with the stock market soaring in response to the national election outcome.
China Zhongwang, the country’s largest aluminium extrusion products maker, completed the world’s largest IPO so far this year. The company, like many other Chinese companies, has benefited from China’s stimulus package. The Government’s help has prompted investors from all over the world to bet that the Chinese economy will recover faster than the rest of the word.
Taiwan’s D-Ram sector has experienced rollercoaster-like sentiment over the past few months with the mood swinging from one extreme to another. ProMOS Technologies was at one point on the verge of bankruptcy, but the sector’s rapid recovery has allowed the beleaguered chipmaker, along with others, to tap the equity market.
The Australian ECM space has been a hive of activity in the first half of 2009 with more than A$20bn raised via entitlement offers and placements in just the last couple of weeks. Huge demand from institutions for increased equity exposure, especially in light of recent rally in stock markets, has made raising such a large amount possible.
The primary equity-linked space in the US and Europe is on fire but things have been much quieter in Asia with issuers still apprehensive about the depth of investor appetite. However, there are signs of a revival in Asia over the coming months.