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Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Capital Markets

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Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Categorized | Financial

Global IPOs fall by a third


Posted on October 2, 2016

Telefonica SA Headquarters And Stores...A pedestrian passes a Telefonica SA-branded telephone kiosk in Madrid, Spain, on Wednesday, April 4, 2012. Telefonica SA, the Spanish phone company that's merging its Colombian assets to help cut $1.7 billion in debt, will have to find buyers for units such as call-center business Atento to soothe investors concerned with liability levels. Photographer: Angel Navarrete/Bloomberg©Bloomberg

The value of initial public offerings globally has fallen by about a third this year compared to the same period in 2015, illustrating the difficulties new listings have faced during a period of market volatility and political uncertainty.

According to data from Dealogic, the total value of stock sold via new listings has hit its lowest level since 2009.

    In the UK alone the value of new listings has fallen by 60 per cent as companies shied away from coming to the market before the EU referendum. The downward trend is also evident in the rest of Europe and the US where volumes have fallen by close to 45 per cent in both regions.

    Several of the big deals launched in Europe have faltered. The sale of Spanish telecoms company Telefónica’s infrastructure unit was shelved after the deal failed to attract sufficient investor interest and while the sale of Danish payments processor Nets was oversubscribed its share price fell after listing.

    Bankers, however, have been hoping for a period of stability between the end of the summer lull and the US elections when they could get deals away.

    “Global IPO markets have picked up the pace since the beginning of September,” said Steve Pearce, global head of equity capital markets with Goldman Sachs. “There have been a number of smaller deals in the US with some large transactions on the road in Europe.”

    He added that investors’ skittishness was balanced by their desire to generate returns before the end of the year.

    The market is “healthy but discerning”, said Gareth McCartney, head of European equity syndicate at UBS.

    A number of deals have come to market unscathed. Duch food delivery start-up Takeaway.com priced its new shares on Friday while the potential €5bn IPO of Germany energy group RWE’s green business Innogy was oversubscribed shortly after books opened earlier in September. It begins trading on October 7.

    In total $82.5bn of new stock has been sold through IPOs in the year-to-date, down from $123bn in 2015 and $190bn in 2014. Deal value was only lower in 2008 and 2009 during the financial crisis.