econintersect.com
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자
No Result
View All Result
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자
No Result
View All Result
econintersect.com
No Result
View All Result
Home Business

With IPOs On Hold, Banks’ Stock Offering Fees Dropped

admin by admin
7월 4, 2022
in Business, Finance
0
With IPOs On Hold, Banks' Stock Offering Fees Dropped
0
SHARES
0
VIEWS

Summary

  • Worst quarter in 13 years for ECM deals
  • Fees down 74% in the quarter, 73% year to date
  • Fate of planned Porsche, Arm IPO still uncertain
  • Chinese banks take top spot in ECM league tables

Recession fears along with Russia’s invasion of Ukraine shocked the equity capital markets (ECM) in the second quarter, denying bankers of lucrative fees for organizing stock sales such as initial public offerings (IPOs).

The slowdown pushed global investment banks’ fees from ECM deals down 74% to $2.6 billion, based on Refinitiv data, taking a hit from the worst quarter in 13 years for ECM markets globally.

IPOs slowdown

IPOs and other capital fetching exercises by listed companies added up to $94 billion between end-March and June 21, a quarter of the amount fetched during a similar period a year ago because of the slump in European and U.S. deals.

Bankers expect market conditions will get better in the second half of this year, with chip-maker ARM, luxury automaker Porsche, and skincare firm Galderma projected to catch the next available IPO window.

Some IPO optimists, however, have disregarded 2022 altogether. Jerome Renard, head of EU Equity Capital Markets at Bank of America, stated:

“In 2022, it is going to be materially impossible to reach a level close to the volume of operations that was done last year. There is no time.”

On June 30, Italy’s electrode maker Industrie De Nora (DNR.MI) fell 3.1 percentage points on its debut in Milan as the group became the first large company to list on Italy’s main market since Russia invaded Ukraine.

Companies Postpone IPOs

Swiss engineering and technology company ABB last week called off the IPO of its E-mobility electric vehicles charging business plan, pointing to “challenging” market conditions.

Italian oil and gas group Eni gave a similar reason for postponing the market debut of its retail and renewables unit.

Other U.S. companies have taken similar measures, including Mobileye, the self-driving car unit of Intel Corp (INTC.O) and social media site Reddit Inc. Brad Miller, head of ECM Americas at UBS. The U.S. Labor Day holiday occurs on September 5 this year, stated:

“Most of the growth-oriented companies across tech, healthcare and consumer looking to IPO have already pushed their dates to enter the market into the post-Labor Day timeframe.”

Miller said some IPO candidates have rescheduled to 2023 or until the outlook is clearer on interest rates, inflation, and the market. Europe and the United States, which traditionally make up about 60% of the global IPOs market, accounted for only 9% of second-quarter issuance, after dropping 96% from last year.

Secondary stock sales fell 70% year-on-year in the quarter, while convertible debt offerings slumped 85% to 7 billion euros. While bankers lamented about the weak market, investors applauded the lower prices.

Luc Mouzon, head of ECM at France-based asset manager Amundi, which invests in stock sales, explained:

“This year has not been bad because what we have been offered is the upper end of the basket in terms of quality and also the lower end in terms of the valuations.”

Last was a historical year for IPO issuance, but an unpleasant one for IPO investors. Most of last year’s largest listings are trading well beneath their debut price with the FTSE Renaissance IPO Index for Europe, Africa, and the Middle East down almost 45% so far this year (.FTIPOS).

“We all know there is a game that tends to be cyclical,” said Amundi’s Mouzon. “It’s not great to be the one that puts the last bid when the music stops.”

Buy Crypto Now

SPAC Stop

The celebration has also come to an end for blank-check companies – formally called special purpose acquisition companies, or SPACs, with tighter regulatory scrutiny and diminishing investor interest.

This shift in investors’ appetite together with slumps in other equity underwritings including traditional IPOs, has inverted the league tables, normally influenced by U.S. banks.

So far this year, up to five Chinese banks have been classed in the top 10 in ECM fees. In 2021, the first Chinese, CITIC, ranked ninth. Stephane Gruffat, co-head of Equity Capital Markets at Deutsche Bank, commented:

“We have witnessed a significant correction in multiples, which has certainly had an impact on whether selling shareholders and issuers are willing to access the public market in the current context.”

IPO: Initial public offering IPO

With Wall Street’s “fear gauge,” the Cboe Volatility Index (.VIX), lingered at 29, way over the 20 safety marker for an IPO, bankers have been seeking cornerstone investors to back their IPOs.

These investors, who pledge to buy shares ahead of the formal conclusion of the book-building process, help restore confidence in the market.

Richard Cormack, co-head of ECM in EMEA at Goldman Sachs, said:

“We believe that cornerstone or anchor processes will be of ever-increasing importance for upcoming IPOs to increase transaction certainty and reduce market risk periods post-launch.”

This strategy is going to be observed by Spanish renewable company Opdenergy, which on Wednesday disclosed plans to launch an IPO to secure up to 200 million euros and is in progressive discussions with a cornerstone investor to underwrite about 25% of the offering.

Tags: businessequity capital markets (ECM)EuropeinvestmentIPOsregulationsharesSPACsStart-upsthe UKthe US
Previous Post

Germany Wants To Make Shares, SPACs, Start-ups, And IPOs More Attractive

Next Post

EU Ready To Tame ‘Wild West’ With New Crypto Market Regulations

Related Posts

Namibia Will Regulate And Not Ban Crypto With New Law
Finance

Namibia Will Regulate And Not Ban Crypto With New Law

by admin
Bitcoin Stumbles As Macro And Regulatory Concerns Arise, What Next?
Economics

Bitcoin Stumbles As Macro And Regulatory Concerns Arise, What Next?

by admin
SEC Accepts BlackRock’s Spot Bitcoin ETF Application
Business

SEC Accepts BlackRock’s Spot Bitcoin ETF Application

by admin
US Senate Finance Committee Asks Crypto Community How To Tax It In Open Letter
Business

US Senate Finance Committee Asks Crypto Community How To Tax It In Open Letter

by admin
Arkham Intel Firmly Denies Affiliation With US Government Amid Criticism Over Privacy
Business

Arkham Intel Firmly Denies Affiliation With US Government Amid Criticism Over Privacy

by admin
Next Post
EU Ready To Tame ‘Wild West’ With New Crypto Market Regulations

EU Ready To Tame ‘Wild West’ With New Crypto Market Regulations

답글 남기기 응답 취소

이메일 주소는 공개되지 않습니다. 필수 필드는 *로 표시됩니다

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins bank banking banks Binance Bitcoin Bitcoin market blockchain BTC BTC price business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe Federal Reserve finance FTX inflation investment market analysis Metaverse NFT nonfungible tokens oil market price analysis recession regulation Russia stock market technology Tesla the UK the US Twitter

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

© Copyright 2024 EconIntersect

No Result
View All Result
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자

© Copyright 2024 EconIntersect