Taiwan’s two giants of financial group and semiconductor maker, Shin Kong Financial and WT Microelectronics offer GDRs debut sale. They raised $400m and $190m respectively from the offering. It makes two GDR (Global Depository Receipt) issuance of a combined $590m in the spotlight of Asia’s equity capital markets. Although the deal flow in the region is thin. The Chinese offering has been doubtful recently, thus investors are eyeing Taiwan’s transaction.
Despite of Covid-19 surge, bankers expect this year to be busier. It is because issuers have built up their capital. Plus, investors are looking for alternative offering deals away from China. A person with knowledge of transactions complained that the market has been too quiet. In this situation, investors are cautious over the transaction in China.
This becomes the reason why the deals offer an alternative. Many potential issuers are in hard technology such as chip making. It has been a hot demand and relatively not too risky in tech sector. Certainly, the market is challenging. But instead of ignoring it, investors are willing to see Taiwan opportunities.
Around five further GDR transactions on the Luxembourg Stock Exchange are in the offing. It is the biggest potential deal coming from Globalwafers. Last month, the firm planned to sell above 50m shares. It could raise around $1bn. Not only Globalwafers, many others like Powerchip Semiconductor Manufacturing, WWYNN and Taiwan Cement are on it too.
They are majorly producers servers for cloud services and data centers. They also plan GDR offers totalling $500m-700m. The leasing giant, Chailease Holding too is planning a GDR sale. But the size is not decided yet. One of the factors contributing to the successful deals are the offerings are the longer investor education period helping in attracting interest under volatility.
