Asia Pacific companies are poised to challenge their 2021 record for share and convertible bond fundraising this year, as an AI boom drives investment in chips, data centres and power systems.
Companies in Asia Pacific raised $327.1 billion through equity deals this year, up 53% from a year earlier, LSEG data showed. The record annual high was $557.6 billion in 2021, when issuers had raised $399.7 billion by the end of September.
“At year-end, we expect issuance to exceed 2021, which was the historical high, underscoring the scale of the capital-raising cycle we are seeing around AI,” said James Wang, head of Asia ex-Japan equity capital markets at Goldman Sachs.
“AI will continue to drive market volumes over the next one to two years.”
The region needs $230.6 billion in the final quarter to beat the 2021 record. That would be a quarterly record, but bankers expect more share sales and convertible bond issues.
The known pipeline includes Australian AI infrastructure firm Firmus, Singaporean data centre operator DayOne and Chinese flash memory chipmaker Yangtze Memory Technologies Co that could raise about $5 billion each.
Dealogic data showed Asia-Pacific IPOs and new listings due to price by year-end could raise $10.4 billion, including Mynt’s $1.3 billion Philippine IPO and Samsung Biologics’ $2.2 billion South Korean rights issue.
Reliance Jio Platforms, Reliance Industries’ digital arm, has won approval for a Mumbai IPO that could raise about $3.8 billion. Deloitte China expects three to four more Hong Kong mega-listings of at least HK$10 billion ($1.3 billion) each.
Companies are raising funds for AI chips, data centres and power. High-technology firms raised $125.8 billion, or 38% of the total, over three times a year earlier, LSEG data showed.
Third-quarter deals showed appetite. South Korean chipmaker SK Hynix raised $26.5 billion in a Nasdaq share sale, while Chinese optical-networking equipment maker Zhongji Innolight raised $7.8 billion in Hong Kong.
But the rush of deals is also making investors more selective, bankers said.
“We’re seeing some signs” of investor caution after the heavy supply of deals, though the market remains open and companies can still raise funds if terms are more reasonable than two or three months ago, said Kenneth Chow, Asia-Pacific head of ECM origination and products at Citigroup.
“There’s really no shortage of liquidity in this market,” said Aaron Oh, UBS Co-Head of Equity Capital Markets for Asia-Pacific.
“The market is very willing to fund growth and make capital available for companies that can show real earnings exposure to the AI buildout, not just an AI narrative.”
Reuters
