Chinese and Indian Companies to Lead Asia Pacific Capital Raising Activities in 2012
J.P. Morgan releases ’Asia Pacific Year in Review 2011’ depositary receipt report
HONG KONG - China and India will continue to dominate regional depositary receipt (“DR”) capital raising activities in 2012, with strong market fundamentals and robust growth forecasts creating stable capital raising environments for domestic companies seeking to tap off-shore markets, according to J.P. Morgan’s ’Asia Pacific Year in Review 2011’ DR report issued today.
The report, which looks at key trends observed over the past year and provides an outlook on the coming 12 months, highlighted China and India as two markets expected to lead the way regionally, with Taiwan to round out the top three most active markets.
Kenneth Tse, Asia Pacific Head of J.P. Morgan’s depositary receipts group, said: “Despite the ongoing uncertainty in the world’s financial markets, Asia Pacific as a region delivered a relatively strong performance last year. With almost 40 issuers raising close to US$6 billion, and Asia Pacific DR trading volumes surging 11% year-on-year, the region clearly leads the way in driving DR growth globally.”
Tse added: “As we look to the year ahead, we expect that the Asia Pacific region will continue to demonstrate impressive growth. New markets, new companies and new instruments such as the Hong Kong Depositary Receipt (”HDR“) platform, are converging and creating a dynamic and sophisticated regional DR market, which continues to attract significant interest from issuers and investors alike.”
“During 2011, J.P. Morgan acted as the depositary bank for Hong Kong’s two HDR listings: SBI Holdings from Japan and Coach, Inc. from the U.S., which followed our landmark listing of Vale in late 2010. The firm’s continued commitment to innovation in the DR markets will ensure we remain well placed to help our clients explore new markets and further build their foundations for long-term growth.”
Additional highlights for 2012 mentioned within J.P. Morgan’s ’Asia Pacific Year in Review 2011’ report include:
-- Asia Pacific is expected to be the most active region globally. In addition to China, India and Taiwan, we may also see deals from Vietnam and Mongolia over the next 12 to 18 months.
-- HDRs will continue to develop as an alternative to American Depositary Receipts (“ADRs”) and Global Depositary Receipts (“GDRs”), with multinational companies with large existing sales operations in Asia, and those that would like to tap a growing pool of liquidity in Asia, seeking to list on the Hong Kong Stock Exchange.
-- Continued growth in unsponsored programs is likely. In 2011, 74 Asia Pacific unsponsored programs were created as compared with 52 in 2010 - this trend will continue.
-- Obstacles to growth in relation to the region’s DR sector include continued uncertainty surrounding Europe, among others.
Key highlights for 2011 include:
-- 39 issuers raised US$5.9 billion via DR IPO or follow-on offerings, compared with 93 issuers raising US$7.9 billion in 2010.
-- 66 Asia Pacific issuers from 11 countries created new sponsored DR programs during 2011, increasing the total number of sponsored Asia Pacific DR programs to 1,087.
-- Asia Pacific DR trading volume reached a record high increasing 11% to 40 billion DRs in 2011, with the value of Asia Pacific DRs traded in 2011 growing 9.6% to US$967 billion.
-- The Greater China region dominated with a 75% market share of Asia Pacific DR IPO capital raised in 2011.
-- Two landmark HDR deals were brought to market in 2011: SBI Holdings from Japan and Coach, Inc. from the U.S.
-- The semiconductor, internet and alternative energy sectors were the most active for Asia Pacific DR trading both in terms of volume and value.
To view the full J.P. Morgan “Asia Pacific Year in Review 2011” report, please visit http://www.jpmorgan.com/visit/2011apacdryir. For market information on DRs and international equities go to J.P. Morgan’s award-winning web site www.adr.com. For more information on J.P. Morgan’s DR services, please visit http://www.jpmorgan.com/visit/adr.
About J.P. Morgan Worldwide Securities Services
J.P. Morgan Worldwide Securities Services (WSS) is a premier securities servicing provider that helps institutional investors, alternative asset managers, broker dealers and equity issuers optimize efficiency, mitigate risk and enhance revenue. A division of JPMorgan Chase Bank, N.A., WSS leverages the firm’s global scale, leading technology and deep industry expertise to service investments around the world. It has $16.9 trillion in assets under custody and $7.2 trillion in funds under administration. For more information, go to www.jpmorgan.com/wss.
About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.3 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
Neither the HDRs, nor the Hong Kong Depositary Shares (“HDSs”) evidenced thereby have been or will be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be re-offered, resold, pledged or otherwise transferred in the United States or to, or for the account of, a “U.S. person” (within the meaning of Regulation S promulgated under the Securities Act), unless the securities are registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and hedging transactions involving the HDRs or the HDSs may not be conducted unless in compliance with the Securities Act.
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