- 41 capital raising transactions bring in over $9.1 billion, up from $3.6 billion mid-2013
- China and Asia-Pacific-based firms dominate IPO activity
- Most new DR programs created since 2011; trading value jumps 15.5% year-on-year
International companies continue to turn to U.S. stock exchanges to connect with American investors for their initial public offerings and subsequent capital raising activities, according to BNY Mellon's Depositary Receipts 2014 Midyear Update.
The first half of 2014 saw the highest level of DR capital raisings in the last three years. As of June 30, 41 capital markets transactions globally raised more than $9.1 billion, well ahead of the $3.6 billion raised through 20 transactions during the same period in 2013. BNY Mellon served as depositary bank for 18 of this year's deals, which have raised over $3.1 billion.
Companies from Asia-Pacific have dominated activity to date, accounting for almost 60% of capital raised with more than $5.5 billion. China was responsible for nearly half of the new capital raising DR programs, led by online direct sales firm JD.com, whose IPO on NASDAQ raised $1.8 billion in May. The majority of DR transactions in the first half of 2014 were from emerging countries. TBC Bank's listing of DRs on the London Stock Exchange represented the largest IPO ever to come out of Georgia. BNY Mellon also supported Brazilian telecarrier Oi in raising $3 billion in the public markets, 40% of which was in DR form.
"After a period marked by concern over U.S. Federal Reserve tapering, investor sentiment is again turning to emerging markets to seek out innovative companies with which to partner," said Christopher M. Kearns, CEO of BNY Mellon's Depositary Receipts business. "The vigorous return of foreign IPOs on U.S. exchanges, using the efficiency and scope of DRs, would indicate that global firms and investors see this as a healthy marketplace with strong upside."
Depositary receipts typically represent non-U.S. companies' ordinary shares and trade on traditional and over-the-counter markets and major stock exchanges worldwide. There are now more than 3,700 DR programs globally available to investors.
Fifty-five new sponsored DR programs were established through June 30, the biggest jump in sponsored programs since 2011. BNY Mellon served as depositary for 28 of those.
The volume and value of total DRs traded rose compared to a year ago. Some 74.6 billion DRs valued at $1.49 trillion were traded globally in the first half of 2014, up 3.5% and 15.5%, respectively, from the first half of 2013.
As of March 31, 2014, total global investment in depositary receipt programs stood at $826 billion, up 18% compared to the same period in 2013.