CORONAVIRUS/COVID-19 affects fund raising activity in Taiwan: accounting firm

Taipei, June 27 (CNA) At a time when COVID-19 continues to impact the global economy, the local capital market has been no exception, with an over 60 percent fall in the amount of funds raised in the first half of this year from a year earlier, according to multinational accounting firm Ernst & Young.

Data compiled by Ernst & Young showed the amount of funds raised on the local equity market through initial public offerings (IPOs) was NT$4.501 billion (US$152 million), down from NT$12.06 billion over the same period last year, while the number of IPOs fell from 19 to 10.

Ernst & Young said the COVID-19 pandemic has prompted many enterprises to put their fund raising plans on hold and dampened the willingness of companies to go public.

During the six month period, Ernst & Young said, the local main board saw four IPOs, down two from a year earlier, and the amount of funds raised plunged 82.1 percent.

On the over-the-counter (OTC) market, the number of IPOs dropped by seven from a year earlier to six in the first half of this year, with the amount of funds raised falling 12.1 percent over the same period of last year, Ernst & Young said.

Among the 10 IPOs that did go ahead, proximity sensor maker Sensortek Technology Corp. was the most successful, raising NT$2.14 billion on the OTC market on June 8, according to Ernst & Young.

Ernst & Young said the high tech industry filed five IPOs on the local equity market and raised a total of NT$2.75 billion during the six month period, topping other industries in fund raising.

On the main board, the electric/machinery industry accounted for the majority of new listings, and on the OTC market, the semiconductor industry took the lead, Ernst & Young said.

Taiwan is not the only market to see a plunge in IPOs. According to Ernst & Young, a total of 412 companies listed their shares worldwide during the January-June period, down 95 from a year earlier with the amount of funds raised down 12 percent at US$66.7 billion.

Looking ahead, Ernst & Young said concerns over the COVID-19 pandemic are expected to continue to impact the IPO market in Taiwan and market uncertainty is unlikely to recede until the fourth quarter.

The accounting firm also cited other factors such as U.S. economic contraction, trade friction between Washington and Beijing and the slowdown of the global economy as possible factors undermining the willingness of businesses to launch IPOs in the second half of this year.