US vs Latin America IPO Market [PDF]

THE INTERNATIONAL IPO MARKET November 2016

NEW YORK STOCK EXCHANGE

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IPOs: By the Numbers •

Since the beginning of 2006, there have been 7,047 IPOs worldwide

•

These deals totaled $2.0T in net proceeds

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The Financials industry saw the most IPO activity, with 1,364 deals worth $655.5B

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China had the most IPO activity for a single country, with 2,000 deals worth $475.6B

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Across the globe, both volume and average value of IPO deals are decreasing


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IPO INDUSTRY ALLOCATION

•

The Financials industry represents 33% of all IPO proceeds internationally since 2006, and the average proceeds of the Financials IPOs is $480.6M.

Rank Industry 1 Financials 2 Industrials 3 Consumer Services 4 Technology 5 Energy 6 Consumer Goods 7 Healthcare 8 Basic Materials 9 Utilities Total


Value ($M) 655,521.5 257,263.1 237,931.1 200,039.9 189,023.0 159,510.3 114,320.9 111,876.7 66,117.0 1,991,603.6

# of Deals 1,364 1,188 831 945 478 782 804 485 170 7,047

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IPO ACTIVITY BY REGION •

Asia made up 42% of IPO proceeds in the market since 2006, with an average deal value of $238.2M.

Rank Industry 1 Asia 2 Europe 3 North America 4 South America 5 Pacific 6 Middle East 7 C. America/Caribbean 8 Africa Total


Value ($M) 833,376.6 497,269.2 420,648.7 81,310.6 61,722.3 60,719.4 23,377.6 13,179.1 1,991,603.6

# of Deals 3,498 1,290 1,494 154 299 179 66 67 7,047

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IPO ACTIVITY BY COUNTRY •

The twenty countries with the most deal proceeds make up 85% of all IPO proceeds since the beginning of 2016, while the twenty countries with the least IPO proceeds make up less than 1% of all IPO proceeds.

Most Active Countries for IPOs Rank Country 1 China 2 United States 3 United Kingdom 4 Japan 5 Hong Kong 6 Brazil 7 Australia 8 Germany 9 Russian Federation 10 Spain 11 India 12 South Korea 13 Singapore 14 Netherlands 15 Italy 16 Saudi Arabia 17 Switzerland 18 France 19 Canada 20 Indonesia Top 20: Total: NEW YORK STOCK EXCHANGE

Value ($M) 475,598.1 394,324.8 94,103.8 93,466.7 81,124.2 70,903.8 53,533.4 52,791.1 45,163.4 44,393.7 39,037.2 34,125.3 32,035.6 31,606.5 29,943.8 28,686.2 26,739.5 26,059.0 22,343.1 20,655.2

1,696,634.3 1,991,603.6

Least Active Countries for IPOs # of Deals 2,000 1,351 292 250 270 122 257 126 52 37 241 222 116 53 85 67 42 98 124 112 5,917 7,047

Rank Country 1 Jordan 2 Iceland 3 Faeroe Islands 4 Papua New Guinea 5 Zambia 6 Marshall Islands 7 Malta 8 Sri Lanka 9 Bahamas 10 Laos 11 Barbados 12 Rwanda 13 Lithuania 14 Tanzania 15 Lebanon 16 Palestine 17 Namibia 18 Maldives 19 Cambodia 20 Botswana Bottom 20: Total:

Value ($M) 260.5 235.7 204.4 196.9 194.6 174.7 153.3 144.7 137.5 109.9 97.5 92.0 56.6 54.8 53.3 50.3 37.8 24.5 20.5 3.0

2,302.5 1,991,603.6

# of Deals 1 3 1 2 1 1 2 4 1 1 1 2 2 1 1 1 1 1 1 1 29 7,047 CONFIDENTIAL

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IPO INDUSTRY ALLOCATION BY YEAR •

Below is the percentage allocation to the different macro industries by year.

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The Financials industry dominated each year excluding 2012, when Technology represented the largest sector allocation. This was thanks in part to the Facebook, Inc. IPO which had $16.0B in proceeds.


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US IPO MARKET •

The US has seen a decrease in IPO activity over the last decade, in both number of deals and net proceeds from each deal; in 2006, the average deal value was $235.7M, decreasing to an average deal value of $202.6M in 2016.

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The Financials industry in the US IPO market followed the trend of the global market as the largest sector allocation of IPOs, with an average deal value of $430.5M.

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Technology, Biotech, consumer and tech are key sectors.


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ASIAN IPO MARKET •

The Asian and US IPO markets have generally followed the same trend, with 2010 as an outlier as explained previously. In the last few years, the US IPO market has shrank faster than that of Asia, with US deal proceeds decreasing by -75.7% since 2014, while Asian deal proceeds decreased by -37.4%.

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Asia has seen a slight decrease in IPO activity over the last decade, in both number of deals and net proceeds from each deal; in 2006, the average deal value was $288.4M, decreasing to an average deal value of $192.0M in 2016.

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Decreased activity in the Asian IPO market this year specifically has been attributed to volatility caused by uncertainty pertaining to global events, such as Brexit and the US presidential election. The slow down in the Chinese IPO market specifically is also a factor keeping Asian investors wary of going public, according to a study coproduced by Reed Smith and Mergermarket Group.


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CHINESE IPO MARKET •

China has the largest IPO market in the world for a single country, by both deal volume and value. The country had 2,000 deals worth a combined $475.6B.

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Although the Chinese IPO market is the largest, the average deal value has decreased since 2006. This is due in part to regulatory changes in China; in 2016, Chinese regulators have limited both deal volume and deal value to protect the stability of the market, according to Bloomberg.

Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total:


Value ($M) 49,563.0 51,776.5 16,267.2 35,312.1 99,492.9 48,661.2 21,584.6 16,226.2 61,671.8 41,820.0 33,222.6 475,598.1

# of Deals 102 168 98 98 417 309 161 48 188 238 173 2,000

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EMERGING MARKETS IPO MARKET •

Emerging Markets have seen a decrease in IPO activity over the last decade, in both number of deals and net proceeds from each deal; in 2006, the average deal value was $328.3M, decreasing to an average deal value of $170.9M in 2016.

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The Financials industry in the Emerging Markets IPO market followed the trend of the global market as the largest sector allocation of IPOs, with an average deal value of $604.2M.


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REGION ANALYSIS: LATIN AMERICA •

The Latin American IPO market is very limited, with only 220 deals over the last ten years that made up only 5.3% of the global IPO market deal proceeds.

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Brazilian IPOs account for 67.7% of Latin American deal value over the last decade with 122 deals spanning the time frame.

Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total:


Value ($M) 8,414.7 33,459.9 7,263.6 14,167.9 7,805.1 8,725.2 5,837.7 13,293.7 2,504.4 2,208.1 1,008.1 104,688.3

# of Deals 34 71 9 9 17 19 14 22 10 9 6 220

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US VS LATIN AMERICAN IPO MARKET •

Latin American IPOs are a fraction of US IPOs in both volume and value; over the last three years, Latin American IPO deal proceeds averaged 6.3% of US IPO deal proceeds

US vs Latin America IPO Market 60,000.0

IPO Deal Value ($M)

50,000.0

40,000.0

US Deal Value

30,000.0

Latin America Deal Value 20,000.0

10,000.0

0.0

2006

2007


2008

2009

2010

2011

2012

2013

2014

2015

2016

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COUNTRY ANALYSIS: BRAZIL • municipalities in the country are facing terrible deficits and are incapable of making payroll. •

Congress must pass a constitutional amendment to cap spending to levels below inflation for the next twenty years, but this is unlikely to be approved without President Temer promising pork barrel spending which would undermine the entire effort.

30,000.0

60

25,000.0

50

20,000.0

40

15,000.0

30

10,000.0

20

5,000.0

10

0.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IPO Deal Value ($M)


# of Deals

IPO Deal Value ($M)

Brazilian IPOs since 2006 Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total:

Value ($M) 5,951.2 26,924.8 4,556.0 14,058.1 5,968.7 4,359.7 928.2 7,552.7 170.9 189.7 243.9 70,903.8

# of Deals 23 54 3 6 10 11 3 9 1 1 1 122

# of Deals

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CAPITAL INVESTED IN BRAZIL •

Institutional investment in Brazil has seen a decrease over the last five years, with a slight increase over the past year. As of 9/30 filings, total global institutional investment in Brazil was $346.4B.


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COUNTRY ANALYSIS: ARGENTINA •

Over the last decade, Argentina has seen very little activity in the IPO market, with only 8 deals completed for net proceeds of $3.4B since 2006.

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In November 2015, pro-market Mauricio Macri was elected president of Argentina. During his tenure as president, the IPO market is showing some signs of coming out of a coma. Already this year, Argentinian company Grupo Supervielle listed its shares at NYSE and there are some other companies ready to do so.

Argentinian IPOs since 2006 1,600.0

5

1,400.0

4 4

3

1,000.0

3 800.0 2

600.0

2

400.0

1

200.0

1

0.0

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IPO Deal Value ($M)


# of Deals

IPO Deal Value ($M)

1,200.0

Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total:

Value ($M) 35.6 1,459.2 112.1 0.0 0.0 1,436.6 0.0 0.0 0.0 0.0 322.6 3,366.1

# of Deals 1 4 1 1 1 8

# of Deals

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CAPITAL INVESTED IN ARGENTINA •

Institutional investment in Argentina has seen slight volatility over the last five years; it peaked in 2014 and has decreased overall since. As of 9/30 filings, total global institutional investment in Argentina was $20.7B.


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NYSE IS THE RIGHT CHOICE

Access the largest group of investors to broaden your shareholder base Increase your liquidity/access to the deepest market in the world Flawlessly execute your IPO/listing with the unique NYSE market model Utilize a greater suite of perpetual investor relations products and services

Celebrate with a listing day event to generate awareness for your brand


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PRESTIGE AND VISIBILITY


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NYSE OFFERS THE BEST GROWTH PLATFORM & GLOBAL VISIBILITY PLATFORM

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Global brand patina • NYSE synonymous worldwide with credibility, quality, stability and reliability • -listed • Now NYSE lists the latest leading technology brands as well

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Most valuable growth platform for enterprise companies • Unsurpassed network of companies for future partnerships • Exclusive NYSE events with C-level influencers

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World renowned media venue

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Suite of marketing, advertising, event programming to maximize brand awareness


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JOIN A COMMUNITY OF BRANDS SHAPING THE FUTURE

87%

77%

80%

Dow Jones Industrial Average

S&P 500

Fortune 100

Financials 91%

Industrials 86%


Consumer 74%

Healthcare 70%

TMT 43%

Energy 97%

Basic Materials 95%

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LEADING EXCHANGE FOR LATIN AMERICAN ISSUERS Market capitalization of all Latin American issuers on the NYSE is $704B NYSE lists 79 companies from the region: Argentina: 16 companies; $37.5B total market cap Brazil: 28 companies; $388.9B total market cap Chile: 12 companies; $77.0B total market cap Colombia: 4 companies; $37.4B total market cap Mexico: 10 companies; $140.6B total market cap Panama: 2 companies; $3.2B total market cap Peru: 4 companies; $17.5B total in market cap Puerto Rico: 3 companies; $1.8B total market cap NYSE lists 100% market share of Brazilian companies registered in the U.S.

Source: NYSE Research and Bloomberg Above image does not include all NYSE-Listed logos As of 6/30/2016


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NYSE IS THE NEW HOME OF DISRUPTIVE TECH IPOS • NYSE share of technology IPOs has increased 5x since the introduction of new listing standards • With more than 50% market share in 2012 2015, the NYSE has become the preferred platform for U.S. listed Technology IPOs

IPO Market Share By Number of IPOs

59%

62% 60% 8% 00-06

45% 11

61% 12

13

14

15

By Proceeds Raised

72%

58%

88%

44% 27% 00-06

17% 11

12

13

14

15

Source: Ipreo and Dealogic. Market share based on NYSE-qualified IPOs


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NYSE IS THE BEST FIT FOR IPOS

More relevant peers

$212M Better IPO proceeds Market Cap $1.2B Diversification Median MKT CAP at IPO

Alternative

Better Listed Company Diversification

50% of 2015 listings are in healthcare (i.e., biotech)

3% 5%

8%

8%

Proceeds: Mkt Cap:

18%

22% Median:

Median:

$2.3B

46%

23%

31%

Technology

35%

7%

50%

14%

NASDAQ

11% 12%

18%

Financials

NYSE

NASDAQ

10% 6% 14%

of companies $5B, Mid Cap $1B-$5B, Small Cap $0.3B -$1B; Micro Cap $1B, Mid Cap $0.3B -$1B; Small Cap $1B, Mid Cap $0.3B -$1B; Small Cap $1B, Mid Cap $0.3B -$1B; Small Cap