Asia's global depository receipts hit US$8.1b in H1

It accounted for 78% of the global capital raised during the period.

The Asia Pacific region raised US$8.1b in total depositary receipts (DR) or 78% of the global capital raised in the first half of 2019, according to a report from Citi Depositary Receipt Services. In comparison, the region raised only US$6.5b during the first half of 2018.

The report noted that DR follow-on offerings increased 125% to US$6.1b, which represented 58% of the total DR capital raised so far during the year.

China accounted for US$6.6b or 63% of the global offerings. Amongst issuers, Nanjing-based financial services company Huatai Securities raised US$1.7b in its June IPO – the largest DR IPO in 2019. In addition, Chinese e-commerce platform Pinduoduo conducted the largest DR secondary offering over the same period, with a US$1.6b follow-on offering.

Amongst sectors, the Internet and the oil & gas sectors accounted for 44% of the total DR trading value; whilst software & services, financials, and consumer discretionary made up 57% of the total DR capital raised.

Citi also noted that unsponsored ADR programs from China and Japan accounted for 46% of the total unsponsored trading volume.

In total, US$10.4b in DR was raised during H1 2019, a 25% increase from the same period in 2019, due to strong demand for non-US equities as well as increased activity in APAC.

The report also found that the trend of Emerging Growth Companies (EGCs) raising capital continued in the first half of 2019, with eight of 10 China-based issuers choosing to come to the American market via the JOBS Act.

Enacted in 2012 to assist small emerging companies to access capital in the US, the JOBS Act modified capital-raising regulatory requirements for a new category of issuer known as an EGC or an issuer generating less than US$1.07b in gross annual revenue. Of the JOBS Act IPO DR deals in the first half of 2019, EMEA-based issuers accounted for approximately 40% by number of deals.