Total Depositary Receipt Capital Raised in the First Half of 2018 Reaches $8.4 Billion

Business Wire 24-Aug-2018 12:00 PM

Asia-Pacific Generates 77% of Total

Demand for non-U.S. equities continued on a strong trajectory as global issuers raised $8.4 billion in depositary receipts (DR) during the first half of 2018, an increase of 104% from the first half of 2017, according to an industry report from Citi.

The rise in DR capital raisings was driven primarily by increased activity in the Asia-Pacific region, with total capital raisings of $6.5 billion – more than 77% of the total pool – compared to just $1.4 billion in the first half of 2017. China-based issuers raised a combined $5.2 billion, accounting for 62% of the total DR capital raised in 2018. Among these issuers, iQIYI, a Beijing-based software & services company, raised $2.3 billion in its March IPO – the largest DR IPO capital raising. In addition, BeiGene Ltd., a biotechnology company, conducted an $800 million follow-on offering – the largest DR secondary offering in the first half of 2018.

The trend of Emerging Growth Companies (EGCs) raising capital continued in the first half of 2018, with eight of nine China-based issuers choosing to come to market via the JOBS Act. Enacted in 2012 to help small emerging companies access capital in the U.S., the JOBS Act modified capital raising regulatory requirements for a new category of issuer known as an EGC (defined as an issuer generating less than $1.07 billion in gross annual revenue). Of the JOBS Act IPO DR deals in the first half of 2018, China-based issuers accounted for more than half by number of deals and 68% by total capital raised.

Citi Depositary Receipt Services remains committed to supporting global issuers seeking to raise capital in DR form.

"Citi was the depositary bank in over a third of the DR capital raising deals in the first half of 2018, continuing our leading position in the industry," said Nancy Lissemore, Global Head of Depositary Receipt Services at Citi. "The rebound in DR capital raising activity demonstrates that the DR structure remains an attractive vehicle of choice for issuers to raise capital."

Other Notable DR Market Highlights in the first half of 2018 include:

• The Internet and Oil & Gas sectors accounted for 48% of the total DR trading value.
• 13 issuers completed IPOs by way of the JOBS Act versus 6 in the first half of 2017.
• Trading volume of unsponsored ADR programs increased 60% from the first half of 2017 to 2.2 billion, primarily due to increases in trading volume from Chinese issuers.
• Unsponsored ADR programs from China and Japan accounted for 48% of the total unsponsored trading volume.

Citi is a leading provider of depositary receipt services. With depositary receipt programs in 64 markets, spanning equity and fixed-income products, Citi leverages its global network to provide cross-border capital market access to issuers, intermediaries and investors.

For more details on 2018 DR highlights, please refer to the Citi DR website: www.citi.com/dr.

About Citi

Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

Additional information may be found at www.citigroup.com | Twitter: @Citi | YouTube: www.youtube.com/citi | Blog: http://blog.citigroup.com | Facebook: www.facebook.com/citi | LinkedIn: www.linkedin.com/company/citi

View source version on businesswire.com: https://www.businesswire.com/news/home/20180824005014/en/