With IPOs on ice, banks' stock offering fees plummet



* 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 (Add details of De Nora IPO)

By Andres Gonzalez, Echo Wang and Lucy Raitano

June 30 (Reuters) - Recession fears and Russia's invasion of Ukraine sent a chill through equity capital markets (ECM) in the second quarter, depriving bankers of lucrative fees for arranging stock sales such as initial public offerings (IPOs).

The slowdown drove global investment banks' fees from ECM deals down 74% to $2.6 billion, according to Refinitiv data, dragged down by the worst quarter in 13 years for ECM markets globally.

IPOs and other capital raising exercises by listed companies totalled $94 billion between end-March and June 21, a quarter of the amount raised during the same period last year due to the slump in U.S. and European deals.

Bankers hope market conditions will improve in the second half of the year, with luxury auto maker Porsche, chip-maker ARM and skincare firm Galderma expected to catch the next available IPO window.

Some IPO hopefuls, however, have written off 2022 altogether.

"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," said Jerome Renard, head of EU Equity Capital Markets at Bank of America.

For an interactive version of the Reuters chart showing quarterly ECM and IPO volumes click here: Link

On Thursday, Italy's electrode maker Industrie De Nora DNR.MI slipped 3.1% on its debut in Milan as the group became the first major company to list on Italy's main market since Russia's invasion of Ukraine.

Swiss engineering and technology company ABB last week postponed the IPO of its E-mobility electric vehicles charging business plan, citing "challenging" market conditions.

Italian oil and gas group Eni cited the same reason for delaying the market debut of its retail and renewables unit.

Other U.S. companies have made similar moves, including social media site Reddit Inc and Mobileye, the self-driving car unit of Intel Corp INTC.O .

"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," said Brad Miller, head of ECM Americas at UBS. The U.S. Labor Day holiday falls on Sept. 5 this year.

Miller said some IPO candidates have pushed back to 2023 or until the outlook is clearer on inflation, interest rates and the market.

The United States and Europe, which traditionally account for around 60% of the global IPO market, made up just 9% of second-quarter issuance, after slumping 96% from last year.

Secondary stock sales went down 70% year-on-year in the quarter, while convertible debt offerings dropped 85% to 7 billion euros.

While bankers bemoaned the weak market, investors celebrated the lower prices.

"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," said Luc Mouzon, head of ECM at France-based asset manager Amundi, which invests in stock sales.

Last year was a record year for IPO issuance, but a painful one for IPO investors. Many of 2021's largest listings are trading well below their debut price with the FTSE Renaissance IPO Index for Europe, the Middle East and Africa down about 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."

For an interactive version of the Reuters chart showing historical ECM trends click here: Link

SPAC STOP

The party has also stopped for blank-check companies – formally known as special purpose acquisition companies, or SPACs, with waning investor interest and tighter regulatory scrutiny.

This change in investors' appetite, along with declines in other equity underwritings including traditional IPOs, has turned the league tables, normally dominated by U.S. banks, upside down.

So far this year, up to five Chinese banks rank in the top 10 in ECM fees. Last year the first Chinese, CITIC, ranked ninth. For an interactive version of the Reuters chart showing ECM league tables in the second quarter click here: Link

"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," said Stephane Gruffat, co-head of Equity Capital Markets at Deutsche Bank.

With Wall Street's "fear gauge," the Cboe Volatility Index (.VIX), hovering at 29, way above the 20 safety marker for an IPO, bankers have been locking for cornerstone investors to support their IPOs.

These investors, who pledge to acquire shares before the formal conclusion of the book building process, help give confidence to the market.

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

This strategy is going to be followed by Spanish renewable company Opdenergy, which on Wednesday announced plans to launch an IPO to raise up to 200 million euros and is in advanced discussions with a cornerstone investor to subscribe approximately 25% of the offering.



ECM pain Link
ECM makes a slow start to 2022 Link
Top ECM fee earners Top ECM fee earners Link



Additional reporting by Emma-Victoria Farr; Editing by Greg
Roumeliotis, Richard Chang and Jane Merriman

免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。

所有缐上交易平台所發佈的資料,僅適用於教育/資訊類用途,不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議,或是交易價格紀錄,或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。

本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。

我們運用 cookies 提供您最佳之網頁使用經驗。更改您的cookie 設定跟詳情。

風險提示:您的資金存在風險。槓桿商品並不適合所有客戶。請詳細閱讀我們的風險聲明