Markets Feb 04

SPACs, IPOs take centre stage for $546 billion fundraising in January

The Special Purpose Acquisition Companies route increases 20-fold as global companies post record numbers of listings and share sales, new data show

by Noor Zainab Hussain
SPACs, IPOs take centre stage for $546 billion fundraising in Jan
A screen showing footage of a military parade is seen in the Kuaishou Technology booth at the China International Fair for Trade in Services 2020 in Beijing. Kuaishou records the biggest initial public offering so far this year. Photo: Reuters. 

Companies raised $546 billion from new bond and share issues in January, bringing record numbers of new listings, special purpose acquisition company (SPAC) deals and share sales, data showed on February 3.

The numbers included $106.15 billion in initial public offerings (IPOs), SPAC and secondary offerings, with the amount of money raised by the SPAC method alone soaring 20 times to $24.26 billion from a year earlier, Refinitiv data analysed by Reuters showed.

Chinese online video company Kuaishou Technology is the biggest IPO globally so far this year, raising $5.42 billion in Hong Kong, followed by Polish parcel locker business InPost, which raised $3.40 billion in Amsterdam.

The SPAC – a shell company that raises money in an IPO before later merging with a privately held company to take the latter public – has become many investors' structure of choice over the past year.

January's haul was already 30% of a total $79 billion raised by SPACs in the whole of 2020. Traditional IPO volumes in the US, however, remained higher than SPACs in January, hitting a 25-year high of $33.9 billion.

CORPORATE DEBT

Companies also raised nearly $439.9 billion in corporate debt in January, a 5% fall since the same period last year, but still the second largest January in 25 years.

Some 47% new bond and share issues were US offerings in January this year, with China second with $23.96 billion.

Nasdaq was the clear winner among exchanges, with 167 issues raising $41.12 billion, followed by the New York Stock Exchange and the Hong Kong Exchange a close third, with both raking in a little more than $18 billion respectively.

That was in stark contrast to European financial hubs London and Frankfurt, which raised $4.29 billion and $1.72 billion respectively.

With reporting by Reuters

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