CHINESE companies raised a record US$148 billion through global equity capital markets in the first four months of 2021, data showed, as they tapped the ample cash available with investors due to the coronavirus pandemic.

That was more than double the sum they garnered from equity markets in the year-ago period and accounted for a fifth of all equity capital raising deals this year, according to data provided by financial software and risks solutions firm Refinitiv.

Of that, Chinese companies raised a record US$31.9 billion through initial public offerings (IPOs), double from the year-ago period.

The data indicated investors were drawn to China’s economic recovery and huge consumer market.

Companies benefitted from the liquidity sloshing around as governments worldwide ramped up stimulus measures to combat the economic impact of the COVID-19 pandemic and consumers cut back on discretionary spending.

“It’s a very strong market and valuations are solid,” Matt Emsley, China managing partner at law firm Herbert Smith Freehills, said.

“We are seeing a number of companies looking to list on fairly tight timetables and we are seeing companies looking to kick off deals running into the second half which indicates there is a lot of desire with financial stimulus plus the level of retail participation and savings that is creating a very strong market.”

China was the second-most active capital-raising country in the world behind the United States, where US$312 billion was raised primarily from Special Purpose Acquisition Companies (SPACs), or blank check firms.

Given the strong start to the year, the volume of Chinese deals may moderate later in 2021, bankers said.

“Can the trend continue? There are a list of more than 100 tech unicorns out of China, so this can definitely continue for several more years but the big question is going to be whether those tech unicorns opt for public markets and IPOs or whether they opt for raising more money in a private format,” said Magnus Andersson, co-head of Asia-Pacific equity capital markets at Morgan Stanley in Hong Kong.

“The jury is still out and how markets perform over the next three to six months is going to be a driver of whether we see private fundraisings coming back or whether we see more public IPOs.”

JD Logistics Inc. is expected to kick off its Hong Kong listing this week to raise at least US$3 billion, the latest in a list of billion-dollar IPOs in the financial hub. (SD-Agencies)