Cross-border IPOs: Choice in an uncertain world

There is little doubt that global economic uncertainty and market volatility are here to stay. The question is, how can companies integrate equity as one of their funding strategies in an unsettled environment? Increasingly, they have looking beyond their domestic markets and traditional financing centres such as London and New York, and seeking a more diverse pool of capital to help fulfil their global ambitions. But what influences the decision on where to list? What are the trends, and where are they leading? Enriched with data and interviews with companies and global capital markets advisers, this study— by PwC and Baker & McKenzie—explores the evolution of cross-border IPO activity over the last decade, describes its main drivers today, and anticipates the likely trajectory of an important market trend.

Key findings

With an increasingly sophisticated capital markets infrastructure in several emerging markets, there continue to be more opportunities for issuers to raise capital beyond the traditional listing centres.

Here are some of the other key findings of our study, gathered from the last decade of data:

  • Businesses that undertake a cross‐border IPO tend to do so because they are seeking benefits—such as greater liquidity or a more knowledgeable investor base—that may be easier to achieve in a foreign market.
  • The decision of where to list is increasingly important.
  • The global equity landscape has shifted, with more IPO centres developing across the global landscape.
  • Regulatory issues will continue to influence the level and destination of cross-border IPO activity.
  • Despite the continuing uncertainty, there is a healthy pipeline of potential issuers exploring a cross-border listing.

Recent trends in cross-border IPOs

As the graph below shows, the first decade of the 21st century saw an intensification of cross-border IPO activity—despite the slump, attributable to the global economic crisis of 2008 - 2009. Still, the market has not yet returned to its pre-crisis levels.

Annual cross-border IPO activity between 2002 and 2011 byvolume of IPOs and value of proceeds raised ProceedsVolume2002200320042005200620072008200920102011051015202530%

Overall, between 2002 and 2011, cross-border IPOs accounted for 9% of total IPO activity and 13% of all proceeds. Here are some of the other important trends from the decade:

  • London (41%) and New York (23%) attracted the most cross-border IPOs, coming from a broad range of countries.
  • Hong Kong and Singapore stock exchanges were regional hubs for Asia-Pacific issuers.
  • With nearly one third (30%) of all completed international listings, Chinese companies dominated cross-border IPO activity.

The map below shows the inter-regional cross-border flows between 2002 and 2011—and highlights some of the large-scale trends.

The top cross-border IPO drivers

Where a company chooses to list is a significant factor in determining its success as a listed company. Listing away from its natural market could lead to problems that outweigh the benefits of the transaction. Indeed, over one third (36%) of investment bankers told us that they expect de-listing to become a trend in the next few years.

So why choose to take that risk? Our study participants pinpoint ten reasons for undertaking a cross -border IPO. They fall into two categories—financial and nonfinancial. (Click on the graph to learn more.)

Cross-border IPOs and future trends


What trends are likely to shape cross-border activity in the short- to medium term? We have identified five key factors:

  1. In the short-term cross-border activity will evolve.
  2. Emerging market exchanges are developing, but not at a uniform pace.
  3. Competition among exchanges will intensify.
  4. Regulation will continue to influence cross-border activity.
  5. Macro-economic factors are surpressing the IPO pipeline.