Baker & McKenzie – Companies raised $72.8 billion through cross border initial public offerings in 2014, more than doubling the amount from last year. The amount raised is the highest since the financial crisis.
Baker & McKenzie has released the 2014 year-end edition of its Cross-Border IPO Index, a semiannual scoring and analysis of cross-border IPO activity relative to overall IPO activity. Fueled by increased cross-border IPO activity around the world, the global index score grew to 34.3 this year, up from 24.9 at the end of 2013.
All figures below are in U.S. dollar.
- Companies raised $72.8 billion through cross-border IPOs in 2014, more than double the amount last year of $33.3 billion and the highest figure since the beginning of the financial crisis.
- Number of listings also increased from 156 in 2013 to 193 this year. The growth in capital raised through cross-border IPOs significantly outpaced domestic listings, driven by the largest IPO of the year, Alibaba, debuting on the NYSE and a growth in economic confidence in many parts of the world.
- Even without the Alibaba listing, the value of cross-border IPOs increased by 43% to $47.8 billion in 2014. This compares to a 31% increase in domestic IPOs in 2014 to $172.7 billion.
- Baker & McKenzie’s Cross-Border IPO Index measures the health of the cross-border listing market up from 24.9 in December 2013 to 34.3 today.
- U.S. key driver of activity. Value of cross-border listings increased by 605% (148% without Alibaba). NYSE most valuable exchange globally.
- Asia-Pacific value up 26% to $23.9 billion dominated by Hong Kong (highest exchange globally with 62 listings) but outpaced by domestic activity up 47% to $31.9 billion.
- Europe, Middle East and Africa cross-border volumes were flat with increasing competition from domestic listings although 39% increase in value of listings to $9.1 billion. LSE leading exchange with 33 companies raising $4.8 billion.
- Companies in the technology industry issued the largest number of cross-border IPOs worldwide, with 41 listings in 2014, followed by healthcare and financials.
- Key drivers of increased tech activity were the post-listing performance of sector IPOs in early 2014 and investors’ strong appetite for companies developing disruptive technology.
- While a significant slowdown in cross-border IPOs appears unlikely in the short term, warning signs have begun to appear in all three major IPO regions.
- Growing interest surrounding listing domestically in Asia Pacific, increased scrutiny regarding the use of variable interest entity structures by Chinese companies in North America and lower-than-expected aftermarket performance of several offerings in Europe, Middle East and Africa have all generated concerns that could impact cross-border listings in 2015.
Companies raised USD23.9 billion in cross-border IPOs in Asia Pacific this year, a 26% increase over 2013. However, domestic listings increased by 47% to USD31.9 billion. The Hong Kong Stock Exchange (HKSE) dominated the region’s exchanges, where companies raised a total of USD22.4 billion in 62 cross-border IPOs — the highest number of listings worldwide.
Europe, Middle East & Africa
Companies raised USD9.1 billion through cross-border IPOs in EMEA, a 39% increase over last year. Despite the increase in capital raised, the number of cross-border IPOs remained nearly flat at 43, as EMEA companies turned to their home exchanges. This year EMEA exchanges hosted 139 domestic IPOs, up from 94 in 2013.
Driven by solid stock market performance, 58 overseas companies raised USD38.4 billion through IPOs in North America this year, a 605% increase over capital raised on the region’s exchanges in 2013. Even excluding the Alibaba Group listing, the value of cross-border IPOs in North America grew by 148% to USD13.4 billion, up from USD5.4 billion in 2013.