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Equity Capital Markets

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The first half of 2017 has seen a rebound in overall IPO activity, compared to the same period last year. Baker McKenzie’s Cross-Border IPO Index shows that the value of issuance globally rose to USD 89 billion and the number of deals to 728 (an increase of 76% and 53%, respectively, from H1 2016).

However, deal making has not reached the same levels as in 2015, as total capital raised in H1 2017 was 24% lower. Still, there is a sense that companies the world over are getting on with business despite recent political developments.

In 2016, The Stock Exchange of Hong Kong Limited (the Exchange) continued to rank number one globally in terms of IPO fundraising, with 126 new companies listing and raising approximately HK$195.3 billion in total. In an effort to uphold the quality and reputation of Hong Kong’s stock market, the Exchange published its 2016 Listing Committee Report (the Report) on 20 March 2017, which  included a review of the Exchange’s work in 2016 and an overview of its policy agenda for 2017 and beyond. The Report highlighted the main issues that the Exchange considered to be of greatest interest to the investing public and listed companies and outlined the Exchange’s position or proposed action in relation thereto.

According to the Report, the Exchange is focused on three areas in particular. These are: (a) suitability for listing; (b) backdoor listing; and (c) capital raising by listed issuers. Other substantial matters considered by the Exchange include, among others, the review of listing on the Growth Enterprise Market Board (GEM), pre-IPO investments and the expansion of the thematic approach to enforcement.

(with contribution from Chloe Choo, chambering pupil at Wong & Partners, member firm of  Baker & McKenzie International.)

Introduction

On January 19, 2017, the Malaysian Securities Commission (SC) announced amendments to its Equity Guidelines, Prospectus Guidelines and Asset Valuation Guidelines to introduce a new framework for the listing of mineral, oil and gas (MOG) corporations on the Main Market of Bursa Malaysia, particularly those engaged  in the exploration or extraction of MOG resources. The amendments were made following the receipt of feedback from investors, industry experts and a public consultation on its proposal to introduce the framework.

The framework is intended to expand opportunities for MOG businesses to enter the equity market and will take effect from March 20, 2017. It covers listings of MOG corporations either directly through initial public offerings, indirectly through acquisition by listed companies, or a qualifying acquisition by special purpose acquisition companies.

Baker McKenzie’s analysis of 2016 healthcare IPOs shows a record year for biotech led to a 2% increase in capital raised from healthcare IPOs in 2016 despite a 39% decline in the volume of listings. Biotech deals, which include healthtech listings, continue to dominate the sector in terms of value, accounting for 45% of total capital raised with USD 8.16 billion from 27 deals. “While healthcare IPOs volume slowed in 2016, the sector outperformed in…