Cross-border IPOs grow share of listings while market falls
Baker McKenzie's full-year Cross-Border IPO Index rose by 16% to 32.3 for 2016, as cross-border deals gained a larger share of new equity deals in 2016.
Issuers raised USD 30 billion from cross-border IPOs in 2016 through 109 deals. Total deal value fell 25% on the prior year but proved less volatile than domestic IPOs, which fell by 47% to USD 56 billion. Cross-border deals accounted for 35% of new IPOs.
Eight out of the top 10 cross-border listings by value in 2016 were on the Hong Kong Stock Exchange, with two on the New York Stock Exchange. All ten were by Asian issuers. With IPO activity down across the board, The New York Stock Exchange was the only major exchange to see cross-border IPO growth, with value up 206% and volume 40%. Issuers raised 75% of the total value of cross-border deals on the Hong Kong Stock Exchange alone. Adding deals on the NYSE and NASDAQ brings the total to 96% of the global value of cross-border deals.
Notably, cross-border listings on the London Stock Exchange in 2016 fell the most of any major exchange, declining by 85% in value and 38% in volume, while domestic UK IPOs dropped 58% by value and 26% by volume.
The average amount of capital raised by a cross-border IPO in 2016 was USD 276 million, compared to USD 160 million for a domestic listing.
The story of 2016 is geopolitical instability, particularly as the world waited on the results of the UK referendum and US elections, along with weak economic performance in key jurisdictions, resulting in weaker investor appetite. Investors have been conservative, rewarding realistic pricing and seeking as much certainty as possible.
Koen Vanhaerents, global head of capital markets at Baker McKenzie