China-Based Issuers Lead Depositary Receipt Capital Raising Activity in 2016

New York - 1 February 2017

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:

  • Non-U.S. companies raised $6.8 billion in DR form during 2016. IPOs in DR form represented $3.8 billion – or 56% – of the total, driven by transactions from the transportation and internet industries.
  • DR trading volume fell 2% to 155.1 billion shares, with 45% of the activity in European, Middle Eastern and African issuers; 31% in Latin American issuers; and 24% in Asia-Pacific issuers.
  • U.S. investment in non-U.S. equities as of the third quarter of 2016 reached $7.2 trillion, up 9% from the same period in 2015.

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.

Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management.

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