Capital Raising DR Programs Rise by 65% in 2013

While the total amount of capital raised fell in 2013, the amount of capital raising programs rose 65% year over year, with 51 transactions coming from companies based in 20 countries, compared to 31 DR capital raisings coming from 12 countries.
By Jake Safane(2147484770)
While the total amount of capital raised fell in 2013, the amount of capital raising programs rose 65% year over year, with 51 transactions coming from companies based in 20 countries, compared to 31 DR capital raisings coming from 12 countries.

These figures came from BNY Mellon’s year-end DR report. For the year, BNY Mellon acted as depositary for 45% of new sponsored programs.

The U.S. in particular had a strong year, as 36 of these programs were listed on U.S. stock exchanges, while 10 transactions took place on the London and Luxembourg Stock Exchanges. However, the total amount of capital raised, $10.4 billion, was down from the $12.7 billion raised in 2012.

China had more capital raisings than any other country with 14, up from only three in 2012. By value raised, the top five countries were Russia, Taiwan, China, Korea and Colombia, together bringing in more than $7.3 billion. For capital raisings, issuers ranged across nearly two dozen sectors, with Financial Services topping the list at $2.4 billion.

“Improved sentiment and climbing equity prices brought issuers back to global markets for their capital needs in 2013, especially in Asia-Pacific where DRs again proved an effective way for companies in the region to raise capital,” says Christopher M. Kearns, CEO of BNY Mellon’s Depositary Receipts business. “Last year, we witnessed a turnaround in the Eurozone debt crisis and then a spring collapse in most emerging market equities. In the second half, investors fueled increases in equity prices across the developed markets not seen since 2008.

“Many DR issuers and investors alike enjoyed the year’s upward trends as global investment in DRs rose by more than $150 billion year-over-year through the third quarter,” Kearns adds.

In all, 85 new sponsored programs came to market last year, up slightly from the 84 in 2012. Yet the total number of unsponsored programs fell from 213 to 173 during this time. Still, by the end of 2013, investors had access to a record-high 3,762 sponsored and unsponsored DR programs coming from more than 75 countries, a 2.3% increase from 2012.

Of the year’s 85 new sponsored programs, most traded in the U.S. In total, 34 of the programs were listed on stock exchanges, with 19 in the U.S., 11 in Europe, and four in Asia. Another 39 issuers chose to trade their new sponsored DRs on the U.S. OTC market.

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