The global IPO market faced a downturn in 2023, but despite this, debt markets grew and new regulations suggest a dynamic shift as we head into 2024.

Market overview

The global IPO market weakened further in 2023, following a sharp decline in 2022. Both the number of deals and the total amount of funds raised fell by around 12% and 27% in 2023, respectively. The U.S. market boosted global IPO activity, as it showed improved investor confidence, while some Asia-Pacific regions faced a challenging environment. Debt capital markets worldwide expanded by 2.4% to USD 9.7 trillion in 2023. In 2023 the investment grade segment expanded by 3.8% to USD 4.9tn, while the high-yield segment surged by 62.2% to USD 284.5 billion. Green bonds also had another strong year, reaching USD 427.3bn in 2023, representing a 7.6% increase.

Key developments in global and Taiwan capital market

The U.S. Securities and Exchange Commission (SEC) is planning to adopt 25 rules for 2024, according to a document released in December 2023 that outlines the planned actions of federal regulators. The most closely -watched rule is about climate change disclosure, which the SEC aims to issue in April 2024. However, the rule has faced repeated delays due to strong resistance from businesses. The China Securities Regulatory Commission announced a series of measures to boost the Chinese stock market. These measures include asking publicly traded companies to boost dividends to reward investors, reducing trading fees, facilitating share buybacks and promoting long-term investment. Hong Kong is a pioneer in digital green bonds, which use blockchain technology to make the bond process more transparent and efficient. In February 2023, it was the first government in the world to issue one-year green bonds as tokens worth HKD800 million. The Hong Kong government intends to issue more tokenized green bonds in the near future.

Taiwan’s benchmark Taiex Index jumped 26.8% in 2023, becoming the second-best performing major equity market in Asia, after Japan’'s Nikkei 225 index. We believe Taiwan equity market growth was primarily driven by the government initiatives to widen fundraising channels for the innovative industries, the strong performance of key players in the tech sector and investors refocusing on Taiwan among other emerging markets.

Key trends and 2024 outlook

Despite the global economy and geopolitics facing many challenges, Goldman Sachs predicts that deal-making, IPOs, and corporate and investor activity will pick up in 2024. The Federal Reserve kept interest rates unchanged in December 2023, signaled in new economic projections that the historic tightening of U.S. monetary policy implemented over the last two years is at the end, and it expects lower borrowing costs in 2024. Investors’ confidence rose as inflation moved closer to the Fed’s target without a harsh recession. Three of the big four global accounting and consulting firms, Deloitte, PwC and KPMG, expect Hong Kong’s initial public offerings to rebound to HKD100bn (USD12.8bn) in 2024.