Depositary Receipt Capital Raised in 2018 Reaches $18.4 Billion
Business Wire 12-Feb-2019 10:05 AM
Asia-Pacific Generates 77% of Total
Demand for non-U.S. equities continued on a strong upward trajectory as
global issuers raised $18.4 billion in depositary receipt (DR) form in
2018, an increase of 18% from 2017, according to an industry
report from Citi.
The rise in DR capital raisings was primarily driven by increased
activity in the Asia-Pacific region, with total capital raisings of
$14.1 billion – 77% of the total pool – compared to just $7.0 billion in
2017. China-based issuers raised a combined $10.7 billion, accounting
for 58% 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,
pharmaceuticals and biotechnology issuers raised nearly $3 billion in
follow-on offerings in 2018.
The trend of Emerging Growth Companies (EGCs) raising capital continued,
with 25 of 28 China-based issuers choosing to come to the US market via
the JOBS Act. Enacted in 2012 to help 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 2018, China-based issuers accounted for
more than two-thirds by number of deals and 80% 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 2018, contributing to our leading position in the industry,"
said Nancy Lissemore, Global Head of Depositary Receipt Services at
Citi. "That DR capital raising activity has nearly tripled since 2016
illustrates how the DR structure remains an attractive vehicle of choice
for issuers," she continued.
Other Notable DR Market Highlights from 2018 include:
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The Internet and Oil & Gas sectors accounted for 48% of the total DR
trading value.
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35 issuers completed IPOs by way of the JOBS Act versus 24 in 2017.
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Trading volume of unsponsored ADR programs increased 72% from 2017 to
5.1 billion, primarily due to increases in trading volume from Chinese
issuers.
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Unsponsored ADR programs from China and Japan accounted for 47% of the
total unsponsored trading volume.
Citi is a leading provider of depositary receipt services. With
depositary receipt programs in 65 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.
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
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