Number of IPOs in Taiwan down but funds raised up by 40% in 2019

Taipei-The number of initial public offerings launched on Taiwan's stock market fell in 2019, but the amount of funds raised from the IPOs rose almost 40 percent, the Taiwan Stock Exchange (TWSE) said Friday.

TWSE Chairman Hsu Jan-yau (???) said 19 IPOs were initiated on the exchange in 2019, down from 29 a year earlier, which he attributed to a generally weak year for IPOs, which fell by an average of 20 percent worldwide because of unfavorable external factors.

In addition, Hsu said, Taiwan's capital market provides different channels for raised funds, and it was possible that some enterprises avoided IPOs because they did not want to disclose their earnings and pursued other avenues to get funding.

Hsu also noted that companies usually need two to three years of assistance from the TWSE to reach the point where they can list publicly, and therefore it is hard to get a complete picture of the exchange's new listings solely based on the 2019 number.

The TWSE has set a goal of 24 IPOs in 2020, which would be around the average of the past couple years.

In terms of the value of IPOs in 2019, Hsu said a total of NT$23.32 billion (US$775 million) in funds were raised, the most in nine years and up 39.39 percent from a year earlier.

According to Deloitte, strong liquidity in the market encouraged investors to chase new IPOs and boost the funds raised.

Among the prominent IPOs launched in 2019 was vehicle financing company Hotai Finance Co., a subsidiary of Taiwan's largest car vendor Hotai Motor Co.

Its IPO was the biggest in Taiwan for the year, raising NT$9.15 billion, according to data compiled by Deloitte.

Wiwynn Corp., a server and storage manufacturer that is a major subsidiary of contract electronics supplier Wistron Corp., raised NT$5.96 billion in its IPO, the second largest of the year, Deloitte's data showed.

Hsu said, meanwhile, that the 23 percent increase in the Taiex, exchange's benchmark weighted index, in 2019 resulted in an increase of NT$7.1 trillion in market capitalization.

The average return rate of the 942 companies listed on the exchange was 29.6 percent, with the average return of the top 50 enterprises, led by contract chipmaker Taiwan Semiconductor Manufacturing Co., hitting 46 percent, according to the TWSE.

Source: Focus Taiwan News Channel