Asia challenges London and New York for cross-border listings

US and Europe dominated last 10 years but change is on the way, argues PwC study

While London and New York have dominated the growing cross-border IPO market in the past 10 years, companies looking at cross-border listings will increasingly turn to non-traditional cities such as Hong Kong and Singapore in coming years, according to a study by PwC.

In the past decade, London has been the most popular venue for cross-border IPOs with a total of 480 such offerings raising a total of $110 bn, according to the ‘Equity sans frontières’ study from PwC and Baker & McKenzie. New York places second, with 264 issuers raising a combined total of $56 bn there.

The study concludes, however, that markets in Asia are growing in importance and will continue to grow as venues for cross-border IPOs as the region’s percentage of global cross-border offerings increases. In the past decade, China has accounted for 30 percent of all cross-border IPOs, a total of 347.

‘Exchanges in developing markets have typically not had the depth to sustain capital requirements to support their growing economies,’ says Clifford Tompsett, capital markets partner and head of PwC’s IPO Centre, in a release.

‘This has started to change. With an increasingly sophisticated capital markets infrastructure in emerging markets, there will be more opportunities for issuers to raise capital locally or regionally, beyond traditional listing centers.’

Despite the emergence of China as a major source of cross-border IPOs, the Europe, Middle East and Africa (EMEA) region is the originator of most cross-border IPOs over the past decade, according to the study. Companies from the EMEA region have accounted for 421 cross-border IPOs in the last 10 years, raising a total of $121 bn.

Most (335) of the companies from the EMEA region carried out their IPOs in the region itself while only 74 EMEA companies carried out IPOs outside the region. Cross-border IPOs in London account for 15 percent of the total value of IPOs in the UK capital during the past decade, and 34 percent in number, according to the study.

London is by far the most popular center for cross-border IPOs from within the EMEA region, and particularly popular with Russia and the Commonwealth of Independent States. Chinese companies, on the other hand, prefer New York. They account for 51 percent of all inbound IPOs in the US in the past decade, for a total of 134 offerings raising $20 bn.

The report concludes, however, that securities markets in emerging market regions will become more regulated, more sophisticated and attract more cross-border IPOs in the future as they turn into ‘the true engine of global growth.’

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