Asian capital markets experienced unprecedented growth in the third quarter, with share sales topping $120 billion across Asia-Pacific - the most for any quarter in six years, according to Bloomberg data. Initial public offerings, placements and block trades raised $47.5 billion in July-September, the biggest haul ever for the period, pushing total fundraising this year above $92 billion and within reach of the $112.5 billion record set in 2021. The boom was driven by Chinese companies raising ever-larger sums and returning to the market more quickly as they sought to fund expansion in the fast-growing AI industry. Alibaba Group Holding Ltd.'s $10.2 billion follow-on offering was the biggest transaction during the period, while Zhongji Innolight Co. raised almost $8 billion in Hong Kong's largest listing in nearly seven years. AI model maker Z.AI Co. has raised $9.6 billion this year through its IPO, placements and convertible bonds, with rival model maker MiniMax Group Inc. and chipmakers Shanghai Iluvatar CoreX Semiconductor Co. and Shanghai Biren Technology Co. all returning to the market during the feverish July period.
India staged a remarkable comeback after starting the year under pressure from Middle East war, falling stocks and persistent foreign selling. Share sales raised a record $26 billion since July, making it the country's best quarter, according to Bloomberg data. The biggest transactions included a $3.2 billion government selldown in insurer Life Insurance Corp. and the long-awaited $2.4 billion IPO of National Stock Exchange of India Ltd., the country's second-biggest ever. The rebound came even as the Nifty 50 Index slumped almost 9.5% from its early August peak, with ample domestic liquidity supporting demand for new offerings. Billionaire Mukesh Ambani's Jio Platforms Ltd. is meeting investors ahead of an expected November debut that could rank among India's biggest IPOs, with Citigroup's Harish Raman noting that international investor interest in IPOs was cautiously optimistic despite recent deal performance. The pipeline remains busy with expectations of more IPOs before year-end.
Global equity markets demonstrated resilience with $34.76 billion in net inflows for the week through September 30, marking a second consecutive week of positive flows according to LSEG Lipper data. US equity funds attracted $20.6 billion for the second straight week, while European and Asian equity funds recorded $6.19 billion and $6.16 billion respectively. The recovery was driven by optimism around AI spending and softer US inflation, with Goldman Sachs reporting that the largest US hyperscalers are on track to spend about $800 billion on capital expenditure in 2026, with consensus expecting spending to rise to $1.1 trillion in 2027. Micron Technology forecasted quarterly revenue above estimates, signaling strong demand for memory chips used in AI applications, while US inflation rose less than expected in August according to a Commerce Department report, reducing urgency for Federal Reserve rate hikes in October.
Despite the record fundraising, the boom unfolded against a much shakier market backdrop. The MSCI Asia-Pacific Index slumped as much as 7% in July as investors questioned whether heavy AI spending could generate sufficient future returns, while Hong Kong's Hang Seng Tech Index has been on a downward trend this year. Weak deal performance is now testing investor appetite, with just two of the 10 largest Hong Kong deals since July trading above water. Several recent Hong Kong listings have traded down on their first day, including fast-fashion retailer Shein Global Holdings Ltd. and chipmaker Longsys Electronics Co.. As HSBC's Martin Zoll noted, "having large transactions trading through the offer price is not helpful for risk appetite," with investors potentially becoming more selective about where they place their money as they approach year-end. The pipeline remains substantial, including Mynt Inc., the company that owns the Philippines' most popular mobile payment app GCash, priced what's set to be the largest-ever IPO in the country, while Australia will also grab a slice of the AI action thanks to the upcoming $5 billion IPO of data center operator Firmus Grid Ltd.
