Private equity fuels Asia’s growth

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December 12, 2018

RAPID growth of Asia's stock markets is driving change in global financial markets - and in M&A. The OECD says integration of Asia's financial markets with the global market has begun . . .

ASIAN companies are now the world's largest users of public equity financing, raising US$81 billion in 2017. Almost twice as many initial public offerings as the annual average between 2000 and 2016 came to market in Asia in that single year. A record number of 1,074 companies listed in Asia in 2017.
In its annual analysis of the global financial market, the Paris-based OCED notes that, on an international scale, the most important development has been the rapid growth of Asian stock markets - both in absolute and in relative terms.
This has, in turn, led to a rise in the number of global pension funds and other institutions investing in Asian equities and Asian corporate bonds. There has also been an increase in mergers and acquisitions.
According to the OECD, integration of Asia's financial markets with the global market has begun. Among the most significant developments, it says, is the implementation of Stock Connect in Hong Kong, which paved the way for foreign investors to buy Chinese A-shares.
"As a consequence, stock exchanges and investment banks in Asia have increasingly become important actors in globally-connected capital markets," says Mats Isaksson, OECD's head of Corporate Governance and Corporate Finance.
Isaksson is author of the OECD Equity Market Review of Asia, launched at the 2018 Asia Roundtable on Corporate Governance.
Thousands of Asian companies are now listed or traded on markets other than their local exchanges, and investment banks from non-Asian markets - in particular from the United States and Europe - play a significant role in Asian markets, together with other globally active intermediaries and service providers.