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OECD Equity Markets Review of Asia


Date of publication
19 October 2017



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19/10/2017 - Stock exchanges in Asia have emerged as the world's fastest growing trading venues for listed stocks and several domestic investment banks in the region are becoming global actors. This new annual review follows and analyses trends in Asian public equity markets.

This review was launched at the 2017 Asian Roundtable on Corporate Governance in Tokyo on 19-20 October 2017.



 Some of the main findings in the review

  • Since 2000, Asian companies have raised USD 1.2 trillion through initial public offerings and USD 2.6 trillion through secondary public offerings. Companies from the People’s Republic of China (China) have been the largest issuers, raising 43% of all public equity in the region, followed by companies from Japan (17%); Hong Kong, China (11%); Korea (8%) and India (7%).
  • Nearly three quarters of all equity capital raised in Asia since 2000 went to non-financial companies. The largest share of the capital raised through IPOs went to industrial firms, while consumer product firms accounted for the largest share of funds raised through SPOs. In three out of the five largest Asian markets, the share of public equity raised by high technology firms has declined since 2008.
  • While growth company IPOs (below USD 50M) have almost disappeared in the European Union and the United States during the last ten years, equity markets for growth companies remained strong in several Asian countries, including Japan, Korea and Hong Kong (China). Over the last three years, Japanese growth companies have on average raised almost USD 1 billion per year.
  • A limited number of sectors account for the majority of Asian growth company IPOs. In Japan, for example, companies from the technology and healthcare sectors have accounted for 40% of all growth company IPOs during the last 5 years. The share of technology sector IPOs was also high in China and Korea. On average they accounted for 17% of all public equity capital raised.
  • During the last decade, Asian companies have increased their listings outside their local market. The most common destination for Asian companies that list outside the local market has been Hong Kong, China. Apart from some high-profile exceptions, relatively few IPOs by Asian companies are made outside the region. As a consequence, the regional stock market’s share of global public equity offerings (IPOs and SPOs) has steadily grown over the last 20 years from 16% in 1997 to 46% in 2016. Outside of Asia, the US has been the most popular destination for Asian companies that choose a foreign market for their listing.  
  • A look at the 100 largest listed companies in 12 of Asia’s largest stock markets reveals a relatively high degree of ownership concentration at company level. In more than half of the 12 markets, the three largest shareholders on average hold the absolute majority of the company’s capital. Japanese and Chinese Taipei corporations have the lowest levels of ownership concentration, with the three largest owners holding 24% and 27%, respectively.
  •  Another salient feature documented in the review is the high degree of government ownership in large listed companies in Asia. An analysis of a simple binary classification of the 100 largest listed companies indicates that, in nine out of 12 markets, higher government ownership is associated with lower company performance. In 10 of the 12 markets, larger average government ownership also tends to be associated with higher corporate leverage.
  • Developments in Asian capital markets have not been limited to the surge in public equity markets. Asia’s global share of corporate bonds, syndicated loans as well as mergers and acquisitions, has also grown significantly. Asia’s share of the global corporate bond market has more than tripled from 10% a decade ago to almost 35% in 2016 and the share of global M&A activity has increased from 10% to 30%.
  • Bolstered by this increase in capital market activities, banks from China, India and Korea have on average during the last 6 years gained more than 20 percentage points in their domestic market shares of investment banking activities. Another effect of the surge in Asian capital market activity is that several Asian banks now have emerged as important global actors.



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