The US has strengthened its position as the preferred destination for initial public offerings and is set to rank as the top country for new equity fundraisings for the fourth straight year, after the recent blockbuster listing of Chinese e-commerce group Alibaba.
In the year to date, companies have raised US$77 billion through listings on the New York Stock Exchange and Nasdaq – twice as much as the amount raised in London and Hong Kong combined, the Financial Times reported, citing data from Dealogic.
IPOs on US exchanges have accounted for two out of every five dollars raised so far in 2014, the figures show. Some US$25 billion of the US total has come from Alibaba, which earlier this month completed the largest IPO ever.
This surge in US listings has accompanied quickening US economic activity and near record highs for the S&P 500 and Dow Jones Industrial Average. Global listings in New York are running at the fastest pace by deal value since 2000 – lifted in part, bankers and lawyers say, by the sheer number of US investors.
“There is a depth of liquidity [in the US] . . . that kind of depth of potential investment is just not available on other exchanges,” said Nick Kronfeld, a partner at Davis Polk.
While New York and Hong Kong remain neck and neck in terms of number of cross-border deals this year, foreign-domiciled companies have raised far more money through IPOs in New York.
Excluding Alibaba, international companies raised US$11.4 billion through US listings, led by Chinese internet, and Israeli and British technology groups, according to Ipreo, the market data firm. Foreign companies listing in Hong Kong, in contrast, raised US$3 billion.
In May, JD.com, the Chinese internet company, raised US$2 billion through a Nasdaq-listed IPO. This was followed a month later by the debut of Markit, the London-based financial data company, on the same exchange. Proceeds from Markit’s offering eclipsed US$1.4 billion.
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