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Global Equity Listings Up by a Third

Investors are being selective and they are very focused on after-market trading.Investors are being selective and they are very focused on after-market trading.

Global equity listings rose sharply in the first half of the year, compared with a year earlier, driven by the US market as well as rights issues in Europe, Thomson Reuters data showed, but remained way off 2015’s surge.

Stronger and calmer markets, a brighter economic outlook in some countries, as well as the avoidance of further political shocks in several European elections helped equity raising markets recover from 2016, when worries about China’s economy, the British vote to leave the European Union and commodity prices discouraged potential issuers.

Companies globally issued $386.8 billion of equity in the first half of this year, up 33% from the same period in 2016, which was the worst since 2008. Despite the rebound, issuance remained way off the highest issuance in more than 15 years in 2015 when $519.5 billion was raised.

Including some 60 initial public offerings and 355 follow-on offerings, US companies raised $116.8 billion in equity in the first half, 46% more than they did in the first half of 2016.

“Investors are being selective and they are very focused on after-market trading. We will see more IPOs in Europe and the United States and underwriters need to remain focused and disciplined on pricing and secondary market performance,” Achintya Mangla, head of equity capital markets in Europe, Middle East and Africa at JP Morgan, said.

More than a quarter of US IPO proceeds were from the high technology sector. Unicredit in the first quarter and Credit Suisse and Deutsche Bank in the second tapped equity markets, cumulatively raised proceeds of more than $26 billion.

For the rest of the year, the market looked to a rights issue from German pharmaceutical giant Bayer to help raise $19 billion worth of equity capital to finance its acquisition of US seeds firm Monsanto.

Relatively, the Asia-Pacific region lagged behind with a rise in ECM volume of 7.4% to $95.1 billion and just one deal in the global top 10: the 30 billion yuan ($4.35 billion) convertible bond issue from China Everbright Bank in March.

Meanwhile, IPOs in Europe declined further from 2016’s slump. The oversubscribed listing of Allied Irish Banks in Dublin and London was a rare bright spot and a milestone for the Irish recovery from the economic crisis almost a decade ago.

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