China-based issuers led initial public offerings (IPOs) and follow-on offerings in depositary receipt (DR) form in 2016, representing more than half of all DR activity, according to Citi’s Depositary Receipt Services Year-End 2016 Report.
China-based issuers raised a combined $3.7 billion, according to Citi’s report, accounting for 55% of the total DR capital raised in 2016. Among these issuers, ZTO Express, a Shanghai-based express delivery company, raised $1.4 billion in its October IPO, earning the title of the largest U.S. IPO of 2016. In addition, Ctrip.com International, a travel services provider, conducted a $1.5 billion follow-on offering in the largest DR secondary offering of the year.
Moreover, China-based issuers accounted for half of the total JOBS Act DR deals in 2016, or 78% in terms of value. Enacted in 2012 to help small and emerging companies raise capital in the United States, the JOBS Act modified regulatory requirements for a new category of issuer known as an Emerging Growth Company, which generates less than $1 billion in gross annual revenue.
“Despite a challenging market environment in 2016, DR trading volume dropped only slightly, reflecting the benefits of U.S. listing to issuers and steadfast interest from investors,” said Nancy Lissemore, Global Head of Depositary Receipt Services at Citi. “As we look ahead in 2017, we remain committed to providing both issuers and investors with the highest quality of DR services.”
Other notable DR market highlights in 2016 include:
Citi is a leading provider of depositary receipt services. With depositary receipt programs in 61 markets, spanning equity and fixed-income products, Citi leverages its global network to provide cross-border capital market access to issuers, intermediaries and investors.
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