Once upon a time, companies in emerging markets sought to hit it big with initial public offerings in New York or London. They skipped over their local exchanges – and their liquidity and regulatory problems. Well, all of that might just be changing. In fact, it could be turning the other way, with western companies looking to Asian stock exchanges for listing opportunities.
Of course, Manchester United is the most recent high-profile company to choose Asia. In fact, its final two appeared to be Hong Kong and Singapore, with the company finally announcing it was choosing the latter. Prada, Samsonite and other luxury consumer goods companies have opted for the likes of Hong Kong, and Glencore listed concurrently on the Hong Kong and London exchanges this year.
According to FT.com, ‘western equity market woes, and Asia’s rising viability as a flotation venue’ are driving the trend. Europe has been ‘inhospitable’, the report continues, with many companies having to yank their IPOs because of market conditions. This has been the case in the US, too, with the number of companies pulling rights issues and IPOs (worth more than $1.5 bn) reaching double digits last week. This was the worst showing, in terms of withdrawn or deferred IPOs, in more than 10 years.
So, we look east.
Stock exchanges in the Asia-Pacific region were how to $48.9 bn in new listings (not including Japan). The US was at roughly half that, with $24.7 bn. The EMEA region hit only $29.6 bn. Interestingly, 34 companies listed on the Singapore Stock Exchange in the first half of this year, with Manchester United poised to join the party.