VIDEO: Equity deals to fuel capital markets growth | Asian Markets

After a more secure macro backdrop emerged in 2024, no less than so far as rates of interest and inflation go, the enhance to issuance in some pockets of Apac’s capital markets has hit a new roadblock within the first few months of 2025: US trade, financial and overseas insurance policies. As a end result, corporations are reviewing how they fund their capex wants, with buyers reconsidering their risk urge for food as they alter assumptions round company earnings and market outlook.

Yet whereas subdued issuance is probably going within the short time period, Aaron Oh at UBS expects the scenario to steadily normalise within the coming months. “Once that happens, we expect [ECM] issuance volumes to be robust across the entire region in Asia Pacific – in China, Southeast Asia, India, Japan and Australia.”

In China, specifically, issuance quantity in early 2025 had surged in contrast with the identical period final 12 months, with after-market efficiency of IPOs additionally notably sturdy, defined Ivy Hu. Further, she added, mega transactions have returned to the market – with some deals within the multiples of billions of US {dollars} – as has the range of transactions, increasing from the give attention to convertibles to additionally now embrace placements and IPOs.

There has additionally been diversification in phrases of sectors in China, from the more conventional exercise from the TMT and industrial names in 2024 to a secondary market now pushed a lot more by artificial intelligence (AI) and client sentiment. “We also see a lot of the primary issuances out of these sectors,” mentioned Hu.

A promising pipeline in Apac

Interest from buyers in AI throughout the area, together with within the infrastructure aspect equivalent to information centres, is predicted to proceed to drive equity deals in Apac for the foreseeable future.

“We believe investor interest around AI will be strong,” mentioned Oh. “As companies need more capex for data centres, we think there’s going to be more activity and interest around the whole AI value chain.”

More broadly, because the market stabilises within the second half of 2025, the correct corporations with the correct tales, in addition to sturdy fundamentals, can faucet into investor urge for food throughout a vary of transactions – from IPOs, to accelerated block trades and follow-ons, to convertibles. “We expect robust activity across all products,” mentioned Oh. 

At the identical time, he believes corporations will keep more centered on their core companies, together with divesting from non-core holdings by block trades, exchangeable bonds and carve-out IPOs of subsidiaries. 

Growing demand for personal markets

As an various channel for each public and personal corporations to raise capital, or to weigh IPOs versus M&A deals, Oh expects to see non-public markets as more and more related this 12 months amid present market uncertainty and volatility. 

Within this pattern, he expects to see dual-track processes emerge. “Companies will decide whether they’re suitable for the public market or if they can get better value in the private market through an M&A sale.”

Increasingly, there can be more structured concepts round listed positions, he added, additionally to help corporations deal with volatility. This sort of strategy may, for instance, embrace locking-in draw back safety, enhancing yield or doubtlessly promoting positions at a premium. 

Getting the timing proper

Product innovation is probably going to be an further route for issuers to handle markets in opposition to as we speak’s backdrop. “We see more Asia-listed companies leveraging Hong Kong to raise international funds and attract international investors,” mentioned Hu.

Ultimately, timing their market entry is more and more important for issuers, in flip calling for them to be nimble. Product innovation is a key half of this, to help corporations take into account probably the most related technique and timing of execution, defined Oh. 

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