|
 Worldwide equity capital market (ECM) deals, from flotations to
rights issues, totalled $678.1 billion in the first nine months of
2014, a quarter more than the same period of 2013 and the highest
since 2007, according to Thomson Reuters data.
Companies around the world cashed in on strong investor demand and
European deals jumped by more than half, hitting the highest level
since records began in 1980.
Initial public offerings (IPOs) in particular stole the limelight,
almost doubling from the same period in 2013 to hit $176.1 billion
worldwide.
The long-awaited Alibaba flotation finally landed in September,
whipping up a frenzy as everyone from founder Jack Ma to kung fu
star Jet Li descended on the New York Stock Exchange to watch the
e-commerce giant's stock rise 38 percent on its first day of
trading.
The listing raised $25 billion after underwriters sold extra shares,
and helped stock market listings across the Asia Pacific region more
than triple to $69.5 billion so far this year.
Equity market deals were also buoyed by the resumption of listings
in China after a hiatus of nearly a year and half, plus a surge in
issuance in Hong Kong and Australia.
The ECM rebound has proved lucrative, with bankers netting a juicy
$300 million in fees for Alibaba alone. Goldman Sachs topped the
global ECM issuance league table by volume, with 300 deals totalling
$61.2 billion, followed by rival investment banks JP Morgan and
Morgan Stanley.
"It's been a fantastic year for some of the banks, but revenue is
skewed towards the tech sector and one jumbo transaction," said
Mervyn Chow, head of the global markets solutions group in Asia
Pacific at Credit Suisse, one of five bookrunners for Alibaba's
record sale.
"This is a landmark deal in every aspect globally and provides very
positive momentum and a textbook roadmap for other Chinese
entrepreneurs looking to float," he said. "It will allow other
up-and-coming Internet companies to follow."
Issuance in the region is expected to continue rising, with large
offerings in Hong Kong, Thailand and Australia likely before the end
of the year.
Key deals include an offer worth up to $6 billion from China's Wanda
Commercial Properties, while Australian insurer Medibank Private's
flotation could fetch four billion Australian dollars ($3.5
billion).
ROCKET FUEL
Share offers from technology, media and telecommunications firms may
ease, but deals from others sectors, including healthcare, are
expected from a wide range of issuers, Credit Suisse's Chow and his
European counterpart Nick Williams said.
[to top of second column] |
"We would expect sponsors to account for a significant part of the
pipeline, but we're also expecting corporate spin-offs, spin-outs,
and a wave of privatizations," said Williams, head of European ECM
at Credit Suisse.
European deals in 2014 have so far accounted for almost a third of
global ECM issuance, rising 54 percent from 2013 to hit $220.3
billion, the highest level for the first nine months of any year
since records began in 1980. Following a glut of private
equity-backed flotations, major corporate deals are emerging. German
drugmaker Bayer announced this month plans to list its plastics
division, worth up to 10 billion euros.
After a quiet first half, Frankfurt is listing multi-billion dollar
Internet firms Rocket Internet and Zalando this quarter. Rocket even
brought its offer forward a week citing "exceptional investor
demand".
In the United States, it was the best first nine months in a year
since 2000 and activity does not look to be slowing anytime soon,
with Alibaba whetting investor appetite for more deals.
"We were all expecting that Alibaba would fuel the market," said
Jackie Kelly, Americas IPO leader at Ernst & Young.
"In a large transaction investors don't get to buy as much stock as
they want. IPOs generally outperform the general market indices,
which is what makes them so attractive. Investors are rushing for
returns."
(Editing by David Clarke)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
