BrokerDealers & Bankers Cashing In on IPO Boom

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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

Its a Beautiful World; Paris-based Worldline IPO

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Below Brokerdealer.com/blog news extract courtesy of FT.com and reporter Andy Sharman

Worldline, the online payments company being spun out of French multinational Atos, has launched its initial public offering at a range that values the company at up to €2.4bn, including debt.The Parisian listing is part of a plan to take advantage of the shift to digital and mobile that has increased the popularity of online payments – though cashless transactions have not caught on as rapidly as some had hoped.

Gilles Grapinet, Worldline chief executive, said the IPO came at “a unique moment of opportunity for growth” with the convergence of three trends – “the digital and mobile revolution, the changes in the regulatory framework for the European payments sector and the shift in strategy by many banks following the financial crisis”.

Specifically, he was referring to banks’ willingness to invest in technology that lowers the costs of transactions.
Worldline, which has revenues of more than €1bn and employs 7,200, specialises in mobile payments for retailers and transport companies, payment processing software for banks and other cashless systems, such as loyalty cards, for hoteliers.
Worldline plans to raise €610m in its IPO, more than half of which will be used to repay a loan to the parent company. Atos plans to keep a controlling stake.The offering has been priced at an indicative range of between €16.40 and €20 a share, implying an enterprise value of €2bn to €2.4bn. Worldline, whose headquarters are in the Parisian suburb of Bezons, filed its document de base – the first step towards flotation – with French regulators at the start of May.
Deutsche Bank and Goldman Sachs are acting as global co-ordinators and joint bookrunners alongside Bank of America Merrill Lynch, Barclays, BNP Paribas and Société Générale. Rothschild is financial adviser to the company.

IPO of the Day: Playing Chicken in Stockholm via Scandi Standard

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BrokerDealer.com/blog news courtesy of Reuters -

Scandinavian food company Scandi Standard said on Monday it would launch an initial public offering in Stockholm that would give it a market capitalisation of up to 2.4 billion Swedish crowns ($361 million).

The company, which makes food products based on chicken and had adjusted EBITDA earnings of 479 million crowns on pro forma sales of 5.2 billion last year, said its shares would be sold at 33 to 40 crowns each.

If the owners decide to increase the offering in full and if the over-allotment option is fully exercised, it will comprise 39.6 million shares, representing 65 per cent of the total number of shares in the company.

Scandi Standard is owned by London-based private equity firm CapVest and Swedish farming association Lantmannen.

Link to full statement: r.reuters.com/hyh22w

($1 = 6.6448 Swedish Crowns) (Reporting by Sven Nordenstam)

 

Investment Banks and BrokerDealers: Getting on Train or Getting Run Over By It

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Steven M. Davidoff, the Law Professor and Deal Junkie of New York Times, explained in his recent blog at DealBook NYTimes that investment banking business is getting highly effected by not only poor economic conditions, but also increasingly new regulatory changes are constraining the potential of investment banking.

The world of Goldman Sachs, Morgan Stanley and the rest of the investment banks is being remade, squeezed by new regulations and record low volatility in the markets.

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So what will the new world look like?

Gary D. Cohn, the president of Goldman Sachs, described the current market well last month when he noted the “difficult environment” for investment banks. He said that “what drives activity in our business is volatility.” If markets never move, he continued, “our clients don’t need to transact.”

The decline in volatility has sharply reduced already low investment bank trading revenue. Citigroup’s chief financial officer, John C. Gerspach, said at a recent conference that Citigroup’s trading revenue could be down 20 to 25 percent in the next year. Other banks are expecting similar declines.

The continuous amendment of new rules and regulations in the investment banking are now viewed by investors and broker-dealers as roadblocks to their investment goals. In this situation, investment banks are being forced to find new ways to maintain revenue or to shrink. Conventionally, investors and broker-dealers believed that these banks are open to make to choices to reorient their business structure, but in reality their options are confined now.

For instance, Morgan Stanley Group is diverting its focus more in wealth management from traditional investment banking as they get aware of market trends in the investment banking sector. However, they do not leave investment banking sector entirely, but they start capital allocation in other finance sectors to stabilize the overall revenue, if for any uncertain reasons investment banking get saturated.

Other banks like Citigroup and Bank of America, are getting focused in retrenchment activities. While, smaller investment banks like Barclays’ are in free fall, departing top executives. Some have announced to cut their bank’s working capital in half, and some reduced their quarter of human capital.

If you are wondering whether the investment banking comes to an end, well this might not be the case. Except all these rushes in the investment banking sector, Goldman Sachs, has played its strengths and remain focused towards trading and traditional investment banking. Goldman is looking to change as little as possible, betting that the economy will boost again. One good reason is that there are more chances that new entrants will try to avoid investment banking sector and rather invest in other capital investments.

As Gary D. Cohn, the president of Goldman Sachs, described, “What drives activity in our business is volatility.” If markets never move, he continued, “Our clients really don’t need to transact.”

Upround Ventures Affirms 2 New Events To Be Held In Israel

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Upround Ventures announces two new events to be held in Israel this year, Mentor Exchange and Innovation Summit. The idea is to bridge the gap of startups graduate accelerator programs or early stage funding of crowdfunding sources or angel investment. The firm connects with qualified Israeli-based technology startups with a large scale financial and strategic capital from Europe, Asia, The United States, and Russia, helping to build associations, create long-term value and grow networks worldwide.

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“It’s about democratizing the playing field and providing a continuum of process, funding and guidance,” said Esther Loewy, founder and CEO, Upround Ventures. “There is a chasm in the ecosystem today for Series A — the new Series B startups that are outside the Silicon Valley cocoon. Upround Ventures was launched based on feedback from both high-caliber entrepreneurs seeking more choices for capital globally, as well as investors in various parts of the world, who have been asking for smarter ways to reach new premium deal flow.”

Upround Ventures has already begun to recognize and promote the game-changing technologies born in this region, then pair promising entrepreneurs with a network of VCs and other strategic investors who can fuel their sustained growth, and in turn, a thriving innovation economy globally.

Series A/B Mentor Exchange
A first-of-its-kind, Upround Venture’s Series A/B Mentor Exchange presents a network of experienced entrepreneurs and veteran executives to steer innovative early-stage technology companies in getting to the next stage. Bringing expertise across sales and marketing to qualified post-seed-stage companies in the Network.

The Mentor Exchange is the first of various initiatives to be kicked off this year that further reinforce the value proposition for Series-A-ready startups, as well as partners and investors.

Upround Innovation Summit 
On May 19th, Upround Ventures will gather many of the world’s rising startups with global investors and corporate development executives looking for high-value, pre-screened companies.

To be held at IBM’s Innovation Center in Israel, the Upround Innovation Summit will feature…

The full article can be found at crowdfundingpr