The outlook for global ECM is healthier now than for several years. The signs of recovery were plain to see at the time of the publication of last year's ECM report, but this year's resurgence of M&A activity coupled with strong secondary market performances have created conditions that do not just suit equity issuance, but actually make it desirable.
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With secondary markets picking up across the world, and M&A activity returning to the fore, bankers expect global ECM volumes to surpass those recorded in 2004. Europe was the stand-out region, with more volume and more variety of business than last year. Mark Baker, Jasper Moiseiwitsch and Stephen Lacey report.
Even as the large overnight risk trade becomes less of a European ECM staple, bankers are having to cope with increasing demands made on them by issuers and selling shareholders. Two developments that have caused a stir are the hard-underwritten IPO and the competitive pre-marketing process. Banks question the benefits of both structures, but sellers of certain assets will continue to find them attractive. Mark Baker reports.
The Middle East has held the potential to offer emerging market bankers significant deal flow for a number of years, but a lack of momentum has meant that deals have been patchy and many mandates have lapsed before a transaction has launched. However, a resurgence in privatisations and the creation of the Dubai International Financial Exchange have led to renewed interest in the region for bankers. Owen Wild reports.
Giving a company money with no identified use for it, and little guarantee of getting it back, would seem to be an unwise practice. But the US “blank check” IPO, a structure whose flaws were revealed amid a wave of corruption less than a decade ago, may be resurrected by a new wave of financings. Stephen Lacey reports.
Riding the wave of multi-year economic prosperity, Latin American equities have assumed a new place in investor portfolios. A region once known for its capital-deficient, high-growth economies is showing signs of maturity, leaving growth as the stand-alone consideration for investors. Stephen Lacey reports.
Australia follows its own path with ECM. From hybrids to rights issues and trusts, the market consistently devises original, effective and fair instruments that feed into one of the most transparent and widely invested equity markets in the world. Jasper Moiseiwitsch reports.
International investment banks have long pondered how to break into the huge Chinese domestic equity market and tap into what is a potentially huge investor base. Recent moves to clean up the country's banks – and a relaxation of foreign ownership restrictions – are providing a route into the local market for international firms, which are increasingly looking to establish joint ventures with domestic firms. Nichole Chan reports.
Now in their fourth full year of existence, Japanese real estate investment trusts (J-REITs) have risen from relative obscurity to become the darlings of the country's equity capital markets. But with inflation rearing its head, and a near-term interest rate rise appearing certain, the red-hot REIT sector may be primed for a fall. Brad Frischkorn reports.
Jet Airways has shortlisted five institutions for an upcoming US$800m funding, said bankers. Jet is raising cash to fund an acquisition of competitor Air Sahara. It is looking to raise US$500m via a CB and US$300m via a GDR, said bankers. The five shortlisted institutions are believed to largely come from the list of six banks that led the Jet IPO. The banks are DSP Merrill Lynch, Deutsche Bank, Citigroup, HSBC, Kotak Mahindra and UBS. Final decisions on mandates, timing and structuring of the respective deals are expected shortly. Mandated...
The Cheung Kong-led Prosperity Reit is going before the SFC tomorrow for approval, with launched hoped for within this week. JPMorgan and Merrill Lynch are leading the US$230m IPO. The deal was on track to launch ahead of the Link Reit. However, the offer was delayed by last-minute questions issued the commission. BNP Paribas Peregrine today started pre-marketing the IPO of Xiamen International Port at a forward P/E in the mid-teens. The deal will raise about US$150m–$200m. The roadshow is tentatively scheduled start on Thursday (December 1)...