Equity capital markets professionals are resigned to another quiet quarter amid persistent macroeconomic woes, but there are still some opportunities out there before the year is out.
Bankers and investors were buoyed by the September blockbuster IPO of German luxury carmaker Porsche [ETR:P911], which is trading well above offer price.
Some see Porsche as the exception to the rule and unlikely to drive any more IPOs to market, but others are more upbeat, hoping it can be the positive marker many were waiting for in a barren year of European listings.
IPOs are a big contributor to bank league tables, which means any big deals yet to come could move the needle in rankings.
Goldman Sachs [NYSE:GS] leads the way with 41 ECM deals and around USD 6.78bn of volume to its name. Citi [NYSE:C] and Bank of America [NYSE:BAC] are in hot pursuit, and both on two IPOs this news service has reported are on track this year - Italian industrial fastening firm Vescovini and UAE cooling systems company Empower.
GS has its own big Middle Eastern deal on track before the end of Q4 in the form of Kuwaiti food franchise business Americana, this news service has reported, joined on the syndicate by HSBC [LON:HSBA] Morgan Stanley [NYSE:MS] and Credit Suisse [SWX:CSGN], among other banks.
Alongside possible IPOs, there is also still a possibility that Italy’s Banca Monte dei Paschi di Siena [BIT:BMPS] could complete a EUR 2.5bn rights issue this year should it be able to find enough new investors to back the deal, as previously reported. BofA and Citi both have roles on the BMPS rights issue but are part of an eight-bank underwriting syndicate.
Credit Suisse is exploring rights issue possibilities after a troubling time for the bank, according to this news service, another potentially huge transaction although it might be hard to do a deal by the end of Q4.
With macro-economic volatility showing no signs of abating, the picture for the last three months of 2022 is similar to the ones that preceded them. EMEA’s ECM bankers will be looking for any opportunities they can to differentiate themselves from the rest of the pack.
This will include potential convertible bonds according to an ECM banker, who said the asset class is heating up again after a renaissance in Q3, as well as opportunistic block trades in highly liquid stocks, which can present banks with the chance to lead sizeable deals for sellers looking to dispose of big equity positions.
Goldman leads the pack in EMEA ECM follow-on activity with deal value of just under USD 4.6bn across 34 deals, according to Dealogic; BNP Paribas [EPA:BNP] leads on convertible bond issuance with deal value of around USD 480m across five deals year-to-date.
“We have Q3 earnings coming which will give us some idea of economic health, but the rate hike cycle is continuing unabated,” said another ECM banker, predicting a slower end of the year but adding that there will likely be some opportunistic activity in the blocks market.
In the quietest of years, whatever game is left is worth playing for.
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