Below Brokerdealer.com blog news extract courtesy of FT.com
Investment banks are cashing in on a boom in global stock market listings this year amid a resurgence of initial public offerings from Europe and Asia. Worldwide IPO fees of $3.15bn for the year to date are up nearly two-thirds from the same period a year ago, according to Thomson Reuters and Freeman Consulting.
The amount garnered in the Americas has risen slightly from $1.25bn to $1.31bn. Fees from these deals in the Asia-Pacific region jumped by almost three times to $853m, and more than doubled in Europe.
IPOs have been a bright spot for banks as volatility in secondary markets vanished, putting pressure on trading revenues. The CBOE Vix equity volatility index this month fell to a seven-year low.
The listings market in the US has been strong for a few years, experiencing a pullback this spring after overheating at the start of the year. Stabilisation in southern Europe has served as a catalyst for a rebound in deals throughout the continent, while Asia has been choppy.
“When you see sovereign yields in Greece and Spain fall, it allows people to put good values on any solid European company that may want to go public,” said Dan Simkowitz, co-head of global capital markets at Morgan Stanley.
The calendar is not necessarily dominated by southern Europe, but influenced by the “healing”, he said.
The IPO revival in Asia and Europe has clipped the global market share of fees for top earning banks as those with a strong regional presence in rebounding areas, such as UBS in Asia, move up the charts.
Sam Kendall, global head of equity capital markets at UBS, said: “Investors in Asia’s market are not just buying anything. The deals have to be priced sensibly, structured properly and have a good equity story. It’s the same thing all over the world.”
In Europe, the rush to list has been led by London where smaller banks such as Zeus Capital and Numis have used strong local profiles to gain market share against much larger competitors. For the complete story, please visit FT.com