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Global IPO Proceeds Hit $268 Billion in 2020, Highest Value Since 2010

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Global IPO Proceeds Hit $268 Billion in 2020, Highest Value Since 2010

The initial public offering (IPO) market performance in 2020 defied all expectations, demonstrating the resilience of equity and capital markets. The year saw a total of 1,363 IPOs receiving $268.0 billion.

According to the research data analyzed and published by Comprar Acciones, IPO volume shot up by 19% in 2020 compared to 2019 while value surged by 29%. Total proceeds were the highest since 2010 when 1,361 IPOs raised $290.2 billion.

In the US, 43 consumer companies completed IPOs during the year, up from 27 in 2019. They raised a collective $19.57 billion, close to three times the $6.77 billion raised in the previous year.

US Exchanges Accounted for 88% of 2020 IPO Deal Value

The most active sectors in the 2020 IPO market were technology, industrials and healthcare. Together, they accounted for a 59% share of global deals and 64% of the total value.

Regionally, the United States saw the highest increase, 30% up in deal number and 78% up in proceeds. From 217 deals that raised $54.9 billion in 2019, there were 282 deals in 2020, raising $97.9 billion.

The Asia Pacific took the lead in terms of value and deal number. There was a 20% increase in deal number from 686 in 2019 to 822 in 2020. Deal value rose by 45% from $93.6 billion to $136.2 billion in the same period.

US exchanges accounted for 79% of global deal numbers and 88% of deal value. US Nasdaq received $55.3 billion from 181 IPOs while the NYSE got $30.9 billion from 43 IPOs.

Q4 2020 was noteworthy with 490 IPOs raising $101.4 billion, an increase of 30% year-over-year (YoY) in deal number and 9% in value. The highest valued IPO in Q4 2020 was JD Health, which raised $4.0 billion. AirBnB raised $3.8 billion while DoorDash raised $3.4 billion.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Nigerian Stock Exchange

SEC Tasks Quoted Companies on Regulatory Compliance Lists Benefits

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SEC Tasks Quoted Companies on Regulatory Compliance Lists Benefits

The Securities and Exchange Commission (SEC) has urged quoted companies to take regulatory compliance seriously, saying that keeping track of compliance requirements is essential for the promotion of sustainable development of businesses.

Lamido Yuguda, Director-General, SEC, made the call while delivering a goodwill message at the third symposium of the Issuers and Investors Alternative Dispute Resolution Initiative (IIADRI) with the theme: “The Burden of Regulatory Compliance on Companies in Nigeria” in Lagos.

He explained that the overriding rationale for the sundry obligations of public companies is needed for an efficient market driven by transparency, accountability, full disclosure and good governance amongst others.

“While these regulatory requirements may appear burdensome to companies, they exist for the protection of investors who rely on accurate and timely information to make an informed judgment and for the proper governance of the companies.

“Failure to comply with these requirements exposes companies to the risk of being sanctioned by the relevant regulatory authorities. Sanctions for non-compliance could be in form of fines and penalties which could, in turn, lead to drains on the bottom-line, value erosion and loss of investors’ confidence in the business with attendant effects on the capital markets.

“Non-compliance also causes reputational risk in terms of bad publicity to the defaulting company and may ultimately result in revocation and withdrawal of license and permits issued by relevant authorities,” he said.

He, however, said that the Commission is engaging with quoted companies and has put measures in place to ease some of the observed burdens on companies.

Also speaking, Mrs. Cecilia Madueke, the Company Secretary for Julius Berger Nigeria Plc, charged companies to see regulation and compliance as a significant risk to their businesses, saying that compliance should always be on the front burner for the governance body of each company.

“In what is clearly a challenging time for businesses, keeping pace with new and changing federal and state regulation is one of many factors that will be critical to success in 2021,” she said.

She lamented the regulatory contradictions in Nigeria, saying that government agencies set up to enable and facilitate the “Ease of Doing Business” constitute themselves into clogs in the wheels of business competitiveness and sustainability, thereby eroding the government’s efforts and commitment leading to the weekly loss.

Analysis by sectors revealed that the industrial goods sector emerged as the lone gainer, appreciating by 1.4 percent.

In their projections for the current week, analysts at Cowry Asset Management said the equities market would trade further southwards as investors stay on the sidelines to target new support levels, “especially in Zenith Bank share price that will be marked down by N2.70k dividend payment.”

Making a similar projection, analysts at Cordros Capital said investors are expected to take advantage of the significant moderation in the share prices to make a re-entry in dividend-paying stocks in the week ahead.

“However, we believe that investors will remain reluctant to leave gains in the market. As such, we expect intermittent profit-taking to continue due to uncertainties about the direction of yields in the FI market. As a result, we think the market will be choppy,” they said.

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Nigerian Stock Exchange

SEC, NSE Seal Pact With AfDB To Promote Green Bond Market Development

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SEC, NSE Seal Pact With AfDB To Promote Green Bond Market Development

The Securities and Exchange Commission (SEC) and African Development Bank (AfDB) Group have signed an agreement on the Nigeria risk-based supervision framework implementation and capacity building project.

The signing ceremony which took place on Friday also featured the Nigerian Stock Exchange (NSE) which will collaborate with SEC and other industry experts to implement initiatives aimed at promoting Green Bond market development.

According to information from the NSE, the AfDB will provide technical assistance as well as a grant from the capital market Development Trust Fund – a multi-donor trust fund – administered by the AfDB dedicated to the development of African capital markets.

Speaking at the signing ceremony, the Senior Director, AfDB Group, Mr. Lamin G. Barrow, noted that, “We are very delighted to sign this agreement, which enables us to accelerate the implementation of key initiatives.

“The grant will enhance the capacity of the SEC in risk-based supervision framework for the financial and securities market, strengthen operational readiness in the areas of risk-based publishing, derivatives and green bonds trading market. It will provide capacity building and training programmes for the NSE, issuers and institutional investors on green bonds, as well as market operators and regulators from the wider Economic Community of West African States (ECOWAS) region.

“Experience has shown that countries with developed domestic capital markets have posted stronger economic growth and structural transformation and that is why AfDB Group is supporting the emergence of a well-functioning and resilient financial and capital market in African countries through various mechanisms.”

The Director-General, SEC, Mr. Lamido Yuguda, also stated, “The SEC is focused on capacity development as a catalyst to drive the actualisation of the 10-Year Capital Market Masterplan 2015 – 2025. Consequently, the SEC designed a targeted training programme to address gaps in regulation and market development to enhance the commission’s readiness to effectively regulate new products and promote the growth of the capital market. Some of these initiatives include the procurement of surveillance solutions, capacity building in the areas of risk-based supervision, green finance and derivatives.

Realising these focus areas align with AfDB’s high five priority sectors for the economic transformation of Africa, we leveraged our strong partnership with AfDB to drive some of these key initiatives to strengthen internal and issuers’ capacity. We are pleased and thankful to AfDB for providing the grant and supporting the execution of this project”.

 

Green Bonds are any type of bond instrument where the proceeds are exclusively applied to finance or re-finance, in part or in full, new and/or existing eligible green projects that align with the four core components of the Green Bond Principles (GBP).

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Nigerian Stock Exchange

AfDB Approves $400,000 Grant for Securities and Exchange Commission of Nigeria to Support Capital Markets Development

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The African Development Bank Group today signed a $400,000 grant agreement with the Securities and Exchange Commission of Nigeria to strengthen securities market regulation and broaden market instruments.

The funds will go towards strengthening the risk-based supervision framework, regulation of derivatives and green bonds, and build capacity for green finance. The grant will be sourced from the Capital Markets Development Trust Fund, a multi-donor fund administered by the Bank.

“This collaboration further underscores our mutual goal to grow our markets and create viable avenues for sustainable economic development for Nigeria and the region,” said Lamido Yuguda, Director General of the Securities and Exchange Commission at the virtual signing ceremony.

The grant is aligned with the priorities of the Bank’s Country Strategy for Nigeria, which envisages measures to stimulate capital market development to unlock financial resources for productive sector investments, infrastructure development and private sector growth.

Lamin Barrow, Senior Director of the Bank’s Nigeria Country Department, noted the urgency of the implementation of the project.

“At a time when countries are striving to build back better from the ravages of the COVID-19 pandemic, improvement of the enabling regulatory and supervision framework will boost domestic resource mobilisation efforts and leverage private sector contributions to achieve a greener, more environmentally sustainable and inclusive post-pandemic recovery,” Barrow said.

Oscar Onyema, Chief Executive Officer of the Nigerian Stock Exchange, thanked the African Development Bank Group and the Securities and Exchange Commission “for this historic event and partnership, to build in-house capacity at SEC, the Nigerian Stock Exchange, issuers and investors in the sustainable finance space, which will help to meet climate finance commitments in Nigeria.”

The project will support the implementation of the SEC’s Nigeria Capital Market Master Plan 2015-2025 and its vision to position Nigeria’s capital market as a competitive and attractive destination for portfolio investments.

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