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Citi Touts AI Hubs as Asia’s Hottest Spots for ECM This Quarter

(Bloomberg) -- More Taiwanese chip, semiconductor firms and their holders are seeking to raise funds through share sales this quarter, according to Citigroup, the top arranger for equity transactions in Asia Pacific this year. Increased activity is also expected from South Korea and India.

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US banks jumped to the top of a Bloomberg-compiled ranking of arrangers for equity and equity linked offerings in the region as Chinese peers lost positions due to a slump in deals in mainland China and Hong Kong. Citigroup was followed by Morgan Stanley, Goldman Sachs, BofA Securities and CITIC Securities in the list for the first quarter.

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“Given the rally we’ve seen in the whole semiconductor space and the chip space, you started seeing cross-holdings being sold down or unwound. This has become somehow a focus for the market, and is expected to continue,” said Harish Raman, Citigroup’s head of Asia equity capital markets syndicate. “We do expect to see more global depositary receipt activity by Taiwanese issuers,” he added.

The Taiwan Stock Exchange Weighted Index has surged about 13% this year. The measure is trading near a record high and outperforming most peers in Asia Pacific, boosted mostly by gains from semiconductor and chip stocks. That’s opened a window for equities sales by companies listed in Taipei and their shareholders, as they seek to benefit from a rally stoked by booming demand for artificial intelligence technology.

On Wednesday, a shareholder of Quanta Computer Inc. was seeking to raise $179 million through the sale of global depositary shares. Last month, semiconductors maker Globalwafers Co. raised $689 million through an offering that was also made in the European market. In January, Alchip Technologies Ltd. raised $413 million through a similar transaction.

More blocks and placements are also expected for South Korean companies this quarter, Citi’s Raman said. Regulators surprised global funds in November by suspending short-selling until June, a move welcomed by the nation’s President Yoon Suk Yeol and individual investors ahead of ahead parliamentary elections this year.

“We still see good appetite from foreigners despite the short sale ban,” Raman said. The end of the ban would “certainly help drive more equity-linked activity in the market,” he added.

Another market to remain busy is India, where additional share sales dominated the market in the first three months of the year. Given a recent correction in mid to small-cap stocks, “there’s been a flight to quality. We should see that continuing,” Raman said.

--With assistance from Charlotte Yang.

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