More Asian Companies Opt to IPO in the U.S.

by CFO Innovation Staff, 07 September 2009

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According to the Wall Street Journal, more Asian companies are going public in the U.S. compared to recent years. They are attracting a higher price than would be possible in their own countries.

Citing data from Dealogic, the newspaper says that five of the 15 initial public offerings that have been priced in the U.S. this year have been from Asia. Chinese video-game maker Changyou.com, which went public in April on the Nasdaq, and Chinese water treatment firm Duoyuan Global Water Inc., which debuted in June on the NYSE, made double-digit percentage gains on their first days of trading and have risen higher since.

Singapore semiconductor designer Avago Technologies Ltd. rose 8% on its debut on the Nasdaq last month and closed Friday up 18% from its IPO price.

"Most equity investors fundamentally believe that China will continue to be a major engine of global growth. The fact is that the Chinese economy continues to do quite well despite global headwinds," says Kevin Willsey, head of equity capital markets for the Americas at J.P. Morgan Chase & Co., in an interview with the Journal.

Quoting observers, the Journal says that among the industries expected to deliver more IPOs are technology, education, and specialised manufacturers with good growth opportunities.

However, the Journal says that not every Asian company has been favoured by U.S. investors. For example, Chinese chemicals firm Chemspec International Ltd. and Hong Kong's CDC Software Corp. floundered on their first days of trading and closed on Friday below their IPO prices.

And not every Asian company is interested in launching its debut in the U.S., reports the Journal. For instance, China State Construction Engineering Corp. opted for Shanghai, and China Zhongwang Holdings Ltd. listed in Hong Kong.

Christine Chang, a joint managing partner at law firm Maples & Calder's Hong Kong office told the Journal that making the decision to choose a listing in the U.S. instead of Asia depends on the company's view of U.S. regulation, and often, what type of industry it is in.

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Asian Companies Look to U.S. for Listings

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Asian Companies Look to U.S. for Listings

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