- Bio-pharma firms account for 67% of all DR capital raising transactions and 34% of total DR capital raised through June
NEW YORK, July 27, 2015 /PRNewswire/ -- Pharmaceutical and biotech companies led the pack in terms of capital raising through depositary receipts during the first half of 2015, representing two-thirds of all transactions and about a third of total dollars raised, according to BNY Mellon's Depositary Receipts 2015 Midyear Update.*
As of June 30, 21 DR offerings globally raised $3.8 billion. Fourteen transactions came from the bio-pharma sector, raising nearly $1.3 billion. Pharmaceutical and biotech firms also accounted for the most new DR programs created this year. Of the 34 new programs established through June, 10 were from the sector.
"Bio-pharma companies, especially those in Western Europe, have been quite active in choosing depositary receipts as a means to raise capital and build awareness with U.S. investors and the analyst community," said Christopher M. Kearns, CEO of BNY Mellon's Depositary Receipts business. "DRs have been a conduit connecting many of these smaller, innovative firms with a wider investment community worldwide."
Over the past three years, BNY Mellon has been the depositary for more than half of all healthcare, pharmaceutical and biotech companies that have raised capital in DR form.
Kearns added, "While investors these first six months weathered market volatility as well as concerns such as the Greek debt crisis and growth rates in China, DR trading numbers rose to their highest levels in four years. The continued enthusiasm for depositary receipt listings suggests that global investors recognize how DRs can help diversify their portfolios to suit a variety of market conditions."
The first half saw two notable firsts in the DR industry. Edita Food Industries S.A.E. chose BNY Mellon for its listing on the London Stock Exchange (LSE), the first global depositary receipt capital raising from Egypt since 2008. Also, as depositary for Fondul Proprietatea S.A., a joint stock company operating as a closed-end investment fund in Romania, BNY Mellon created a DR program for its dual listing on LSE's Specialist Fund Market, the first ever closed-end fund to list there in depositary receipt form.
Depositary receipts typically represent non-U.S. companies' shares and trade on U.S. traditional and over-the-counter markets and major stock exchanges worldwide. There are more than 3,650 DR programs globally available to investors as of June 30.
Key H1-2015 highlights:
- Volume and value of total DRs traded were highest since 2011. Some 81.6 billion DRs valued at $1.57 trillion were traded globally in the first half of 2015, up 8.6% and 4.9%, respectively, from H1-2014.
- Thirty-four new sponsored DR programs were established through June 30. BNY Mellon served as depositary for 24 of those, or 70% of all new sponsored programs.
- The first six months of 2015 saw more modest levels of capital raised compared to last year. Twenty-one global DR offerings raised $3.8 billion, with 18 of these listed on U.S. exchanges. For the same period in 2014, there were 41 capital raising transactions, bringing in over $9.1 billion.
- As of June 30, 2015, total global investment in depositary receipts was nearly $825 billion, essentially unchanged from a year ago.
Detailed first half highlights:
- Of the 21 global DR capital raising transactions during the first half, the Europe, Middle East, Africa (EMEA) region led all others with 11 offerings, raising more than $1.4 billion.
- The top 10 DR programs as defined by price performance through June 30 were led by the Irish company Innocoll AG (+150%), followed by China's China Southern Airlines Co Ltd (+144%), Japan's MonotaRO Co Ltd. (+120%), Global Ports Investments PLC from Russia (+101%), Cheetah Mobile Inc. from China (+90%), China's Vimicro International Corp. (+87%), China's Sinopec Shanghai Petrochemical (+84%), Denmark's Forward Pharma A/S (+83%), GW Pharmaceuticals PLC from the UK (+82%), and China's eHi Car Services Ltd. (+77%).
- The BNY Mellon Classic ADR Index(SM) Series, which tracks the performance of depositary receipts by country of origin, showed Denmark with the highest total return through June 30 at +20.6%, followed by Russia (+19.6%), Japan (+14.0%), China (+12.4%), and Ireland (+10.6%).
- By sector, the BNY Mellon Classic ADR Index(SM) Series had Healthcare leading with total returns of 8.8%, followed by Consumer Services (+7.9%), Consumer Goods (+7.6%), and Financials (7.6%).
- The EMEA region also experienced the most trading traffic with 33.5 billion DRs traded with a value of $645 billion, followed by Latin America with 25.6 billion DRs traded at a value of $234 billion, and Asia-Pacific, which traded 22.5 billion DRs valued at $693 billion.
- Banks was the most actively traded sector with 14.5 billion DRs traded at a value of $129.2 billion. Oil, Gas & Consumable Fuels came in second at 14.0 billion DRs traded at a value of $205.2 billion, followed by the Metal & Mining industry with 11.0 billion DRs traded at a value of $114.3 billion, Internet Software & Services with 6.1 billion DRs traded at a value of $359.7 billion, and Semiconductors & Semiconductor Equipment with 4.5 billion DRs traded at a value of $86.8 billion.
To see BNY Mellon's 2015 DR Midyear Update, visit www.bnymellon.com/dr.
BNY Mellon acts as depositary for more than 2,700 American and global depositary receipt programs as of June 30, 2015. Acting in partnership with leading companies from over 65 countries, BNY Mellon is committed to helping securities issuers access the world's rapidly evolving financial markets and delivers a comprehensive suite of depositary receipt services. Learn more at www.bnymellon.com/dr.
BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries and more than 100 markets. As of June 30, 2015, BNY Mellon had $28.6 trillion in assets under custody and/or administration, and $1.7 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Learn more at www.bnymellon.com. Follow us on Twitter @BNYMellon or visit our newsroom at www.bnymellon.com/newsroom for the latest company news.
*Sources: Bloomberg, BNY Mellon, and other depositary websites; all data as of June 30, 2015, except where noted.
This release is for informational purposes only. BNY Mellon provides no advice nor recommendation or endorsement with respect to any company or securities. Nothing herein shall be deemed to constitute an offer to sell or a solicitation of an offer to buy securities. Depositary Receipts: Not FDIC, State or Federal Agency Insured; May Lose Value; No Bank, State or Federal Agency Guarantee. BNY Mellon provides no advice nor recommendations or endorsement with respect to any company, security or products based on any index licensed by BNY Mellon, and we make no representation regarding the advisability of investing in the same.
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SOURCE BNY Mellon