DR capital raising more than tripled in 2014 from 2013 to the highest level since the 2008 financial crisis as Chinese companies took the lead, according to a study by BNY Mellon.
Capital raised via DRs surged to more than $38 bn in 2014 from $10.4 bn in 2013, BNY Mellon says, citing data up to the end of November this year. China’s Alibaba – which held a $25 bn IPO in September – and Baidu were the top two issuers, and more than a third of the year’s capital raising transactions came from China, the firm says.
Trading volume, meanwhile, rose to an estimated 152 bn DRs in 2014, representing a 6 percent increase on 2013, based on data from the first 11 months of the year plus projections for December.
‘Investors continue to see DRs as a preferred option for portfolio diversification and cross-border investing, despite recent volatility in global stock markets,’ says Christopher Kearns, CEO of BNY Mellon’s DR business, in a press release. ‘The dramatic jump in capital raised through DRs shows companies from around the globe rely extensively on DRs to finance their growth and expansion.’
China also led the world in terms of value traded, with a total of $804 bn this year, according to the study. Brazil came a distant second with $408 bn, followed by the UK with $393 bn, Russia with $201 bn and the Netherlands with $95 bn. By volume traded, Brazil was top, at 37.2 bn DRs, followed by China, with 24.6 bn.
