(Bloomberg) — Blockbuster share sales from artificial intelligence-related companies in the Asia Pacific led to a record for equity capital markets activity last month, despite weakness in the region’s stock markets.
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Initial public offerings, placements and block trades raised more than $83 billion in July, the highest ever monthly haul for firms from the region, data compiled by Bloomberg show. South Korea’s SK Hynix Inc. led the charge with its $26.5 billion US listing — the biggest by a foreign company on American exchanges, while mainland China saw its second-largest IPO with chipmaker CXMT Corp.’s 66.6 billion yuan ($9.9 billion) debut.
The burst of activity came as the AI rally suffered a big wobble last month as investors questioned whether the pace of spending on data center buildout is sustainable and can justify elevated valuations. The MSCI Asia Pacific Index slumped as much as 7% in July, although it has since rebounded.
Momentum in share sales has continued into August.
“Corporate sentiment is generally high, and businesses are moving decisively to raise capital and support growth opportunities,” said Phyllis Wang, head of APAC equity capital markets syndicate at Goldman Sachs Group Inc.
Aside from SK Hynix and CXMT, optical transceiver maker Zhongji Innolight Co. raised almost $7 billion in its Hong Kong listing, the city’s largest first-time share sale in seven years. Other Chinese AI-related companies went on a fundraising spree at the start of the month, although several of those deals are now trading underwater following the weak spell in equities.
“Beyond the semiconductor and memory trade in Korea and Taiwan, investors are increasingly focused on China’s AI infrastructure and supply chain and we believe this is only the beginning,” said Cathy Zhang, head of APAC ECM at Morgan Stanley. Equally, investors are broadening their exposure to include consumer internet, healthcare, industrials and other sectors, she added.
August has already seen about $7 billion worth of share sales, the bulk of them Indian as the South Asian market starts to pick up after a very subdued first half. India’s government raised $3.3 billion from its sale of a stake in Life Insurance Corp., while hospital operator Manipal Health Enterprises Ltd. rose after its $960 million IPO.
