NEW YORK--(BUSINESS WIRE)--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:
- The Internet and Oil & Gas sectors accounted for 48% of the total DR trading value.
- 35 issuers completed IPOs by way of the JOBS Act versus 24 in 2017.
- Trading volume of unsponsored ADR programs increased 72% from 2017 to 5.1 billion, primarily due to increases in trading volume from Chinese issuers.
- 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, 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.
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