Cross-border deals proved active in the first half of 2018 with a surge in capital-raising in North America leading the charge.

 

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The first half of 2018 has witnessed a dip in global IPO activity as a result of lower capital raising in Asia Pacific and EMEA, according to the latest research from Baker McKenzie. Worries around geopolitics – in particular US President Trump’s protectionist policies as well as a lack of progress around Brexit negotiations – weighed on investors’ minds and dented the headline numbers.

A total of 676 listings were recorded in H1 2018, a fall of 20% on the same time last year. The value of those listings also fell, down 15% to USD 90 billion.

Investors appear to be adopting a ‘wait and see’ approach in light of both the US and UK political situations and increased market volatility. The dip in Asia Pacific and EMEA only slightly offset by stronger cross-border capital raising in North America and higher domestic listings in Latin America.

Cross-border deal activity

Cross-border deals totalling over USD 16.6 billion were recorded, a jump of around 15% on the same time last year. The number of deals also climbed, up 18% to 85, with three of the top ten cross-border IPOs debuting on North America exchanges.

Unsurprisingly, the New York Stock Exchange (NYSE) and Nasdaq were the leading stock exchanges for all IPOs in terms of value and volume. NYSE was the top destination for cross-border capital raising while Hong Kong - both the mainboard and GEM (Growth Enterprise Market) - was the most active destination for cross-border IPOs due to the volume of China-domiciled companies listing on the exchange.

The London market appears to be bearing the brunt of concerns around the Brexit process with both the value and volume of deals recorded there dropping sharply. Capital raising fell by 50% for the first half of 2018 to USD 4.6 billion while the number of issues fell by 9% to 32.

Koen Vanhaerents, Global Chair, Capital Markets, said:

While domestic issuers are adopting a ‘wait and see’ approach in light of various political issues, fears over globalisation  going backwards and economic nationalism haven’t reached the cross-border market.  To see cross-border activity going up shows a good degree of health in global equity markets, despite quieter domestic markets.
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