Aurelia Butler

NEW YORK/LONDON (Reuters) – Initial public offerings (IPOs) around the world raised a record $594 billion in 2021, riding the coattails of stock market rallies, yet often disappointing investors with their subsequent stock performance.Companies ranging from technology start-ups to blank-check acquisition firms flooded the market with offerings, capitalizing on investors’ willingness to place speculative bets as low interest rates and the re-opening of economies thanks to COVID-19 vaccines fueled their appetite for risk.”It was a truly euphoric capital market when you put it in the context of new issuance activity, and in particular in the creation of new public companies,” said Andrew Wetenhall, co-head of equity capital markets in the Americas at Morgan Stanley (NYSE:MS). Some of those bets worked out. Those who bought into the $$1.2 billion IPO of lending start-up Affirm Holdings Inc, backed by PayPal Holdings Inc (NASDAQ:PYPL), in January have more than doubled their money, versus a 25% return in the S&P 500 index.But many IPOs soured. Shares of Swedish vegan milk maker Oatly Group (NASDAQ:OTLY) AB, which raised $1.4 billion in its IPO in New York in May, are down 53%, while those of British food delivery app Deliveroo Plc, which raised 1.5 billion pounds ($2.1 billion) when it listed in London in March, are down 46%.The Renaissance IPO index, which tracks the average performance of newly listed U.S. IPOs, is down about 8% for the year, compared with a 25% rise in the S&P 500 index.Some bankers cautioned that shares of some of the companies that went public in 2021 are still trading at historically high valuations, even if they took a hit after their IPO. This is because many investors were willing to pay top dollar to buy into these companies in private fundraising rounds in the run-up to their IPOs. “The issue is that buyers of these IPOs as well as after-market buyers are marking losses,” said Paul Abrahimzadeh, co-head of North America equity capital markets at Citigroup Inc (NYSE:C).A total 2,097 IPOs, excluding those of special purpose acquisition companies (SPACs), raised $402 billion in 2021 globally, according to data provider Refinitiv. That was an 81% increase in proceeds and a 51% rise in the number of IPOs from 2020.Including SPACs, which are shell companies that typically launch when they have lined up investors, IPO proceeds in 2021 reached $594 billion, according to data vendor Dealogic.The biggest sectors driving IPO volumes were technology and healthcare. There were 426 technology IPOs launched this year and 332 healthcare-related deals, collectively accounting for almost 42% of IPO proceeds raised by companies globally, according to Refinitiv. Among the biggest offerings in 2021 was electric-vehicle maker Rivian Automotive Inc, which raised over $12 billion in its market debut in November, making it the largest U.S. IPO since Alibaba (NYSE:BABA) Group Holding Ltd in 2014. Other major ones included Chinese online video company Kuaishou Technology, with $5.4 billion in proceeds, and Korean e-commerce giant Coupang Inc, which raised $4.6 billion.”It has been an extraordinary year for equity formation globally – dare I say one that is unlikely to be repeated any time soon,” said James Fleming, global co-head of equity capital markets at Citigroup Inc.SPACS RETREATSPACs, which went public mostly in New York, raised a total of about $160 billion this year, accounting for 28% of the total proceeds raised by U.S. IPOs, according to Refinitiv. They had a roller-coaster ride as investor enthusiasm for them at the beginning of the year turned to disappointment because of their poor returns.The main SPAC exchange-traded fund, the Defiance Next Gen SPAC Derived ETF, has shed 25% of its value year-to-date after peaking in February.[L4N2N13S5]”The peak pace of (SPACs) activity was never sustainable and now the market is consolidating. But SPACs are not going away,” said Eddie Molloy, co-head of equity capital markets in the Americas at Morgan Stanley.The IPO pipeline for the first quarter of 2022 is strong, with social media platform Reddit, transportation tech start-up Via, software maker Cohesity and private equity firm TPG having filed with regulators to go public.Still, investment bankers say the recent lukewarm financial performance of many IPOs means that this year’s bonanza is unlikely to be repeated in 2022, especially if stock markets lose some steam because of inflation and other economic concerns. There is also regulatory risk. The U.S. Securities and Exchange Commission has cracked down on the New York listings of Chinese firms, requiring more disclosures. Ride-hailing giant Didi Global Inc, which completed its $4.4 billion IPO in New York in June, has said it will move its listing to Hong Kong, as China pushes many of its companies to go public closer to home.”I have to think (2022) will be a down year on global issuance levels,” Fleming said. More

The pilot project, previously planned for the second quarter of 2022, will evaluate the use of the CBDC in cash-like activities within a limited scale, deputy central bank director Kasidit Tansanguan told a news conference.The project will involve transactions such as deposits, withdrawals and fund transfers by financial institutions and around 10,000 users.After discussions with relevant parties and careful consideration, Thailand will proceed slowly, Kasidit said.”Thailand can still take a gradual step in the retail CBDC to ensure efficiency and prudence as it does have a problem with fund transfers or payments as some other countries,” he said.The retail CBDC is not to compete with cryptocurrency or stable coins but aimed at reducing financial costs, he added.A retail CBDC is a digital form of money issued by a central bank comparable to physical banknotes. It can be used in financial transactions both online and offline.The BOT, however, has said it does not support use of digital assets, such as bitcoin and ether, as payment for goods and services due to risks. More

How many of the investment calls made a year ago did what they promised? As is usual in any year, some asset classes stubbornly refused to do as they were told. Take the dollar. At this time last year, shorting the dollar was the most “crowded” trade, BofA said, citing its monthly fund manager survey. Some have pointed out in the past how his particular poll has acted as a contrarian indicator but this one has been particularly spectacular; the dollar index is up 7% this year. No central bank can “out-dove” the Fed, we were told, but of course, plenty managed it.The other one that went wrong was emerging markets; expecting a rebound in trade, tourism and commodity prices, alongside dollar weakness, Morgan Stanley (NYSE:MS) a year ago told clients “Gotta Buy EM All!” Hopefully they didn’t. Emerging currency debt has lost 9% and equities are down 6%. Those index moves of course contain some gems (look at 20% gains for Indian shares and a 15% rise for frontier market equities) but also unfortunately… some Turkeys. Even after some unorthodox measures by the administration to repair the damage, the lira remains down some 50%-plus on the year. The commodity and oil bet has worked however, as has U.S. tech, the gift which kept giving — for all the threats of more fines for monopolistic behaviour, higher taxes and challenges from smaller tech firms, the U.S. Nasdaq index rose 26%. And makers of semiconductors — dubbed the new oil by some — are up 40%, not too far behind Brent’s 45% rebound. More

(Reuters) -U.S. automaker General Motors Co (NYSE:GM), Alphabet (NASDAQ:GOOGL) Inc.’s Google and its self-driving auto-technology company Waymo on Thursday joined the companies no longer attending the Consumer Electronics Show (CES) in person early next month due to rising COVID-19 infections.GM Chief Executive Mary Barra had been scheduled to give a keynote speech at the annual conference on Jan. 5, during which the company would have shown its electric Silverado pickup truck for the first time. Barra will still make the speech and presentation remotely, a spokesman said.”We have decided to move to an all-digital approach with our activation at CES 2022 in January,” the U.S. automaker said in a statement. “We are continuing with our plans on Jan. 5 to share our significant company news, including the reveal of the Chevrolet Silverado EV.” A Google spokesperson said in a statement: “After careful consideration we have decided to withhold from having a presence on the show floor of CES 2022,” adding that Google would continue to “identify and support virtual opportunities.”Waymo said in a blog post that it hopes to participate virtually if possible at the Las Vegas event, which traditionally has drawn over 180,000 people from around the world to discuss emerging technologies and party through the night with business contacts. ByteDance-owned TikTok said it would hold a virtual event for partners and advertisers. Also on Thursday, Intel Corp (NASDAQ:INTC) said it would minimize staffing at CES.”The health and safety of our employees, partners and customers  is  always a top priority,” the chipmaker said. “Our plans for CES will move to a digital-first, live experience, with minimal on-site staff.”Several other companies, including Facebook (NASDAQ:FB) parent Meta Platforms Inc, Twitter Inc (NYSE:TWTR), Lenovo Group (OTC:LNVGY), AT&T Inc (NYSE:T) and Amazon.com Inc (NASDAQ:AMZN) dropped in-person attendance plans earlier this week, saying they would not send employees out of caution over the spread of Omicron.CES officials said the event will still be held in person from Jan. 5-8 with “strong safety measures in place,” including vaccination requirements, masking and availability of COVID-19 tests.”Our mission remains to convene the industry and give those who cannot attend in person the ability to experience the magic of CES digitally,” CES said in a statement. “CES 2022 will go forward as important innovation for world health and safety, mobility and solving problems will be exhibited.”It added that while it had received 42 exhibitor cancellations since last Thursday, that was less than 7% of the exhibitor floor and 60 others had been added.The Omicron variant of COVID-19 was first detected last month in Hong Kong and southern Africa, sparking global concerns about a fast-spreading new version of the virus. Coronavirus infections have soared wherever highly infectious Omicron has spread, triggering new restrictions in many countries. More

(Reuters) -Crocs Inc said on Thursday it would buy privately owned footwear label Heydude for $2.5 billion, as the rubber clogs maker looks to cash in on the pandemic-led surge in demand for casual shoes. Consumers stuck at home during the lockdowns last year ditched dress shoes for more comfortable footwear, benefiting companies such as Crocs (NASDAQ:CROX) and Ugg brand owner Deckers Outdoor (NYSE:DECK) Corp. Demand has remained firm this year.Crocs said it would pay $2.05 billion in cash, funded mostly by a term loan, and $450 million in Crocs shares issued to Heydude founder and Chief Executive Alessandro Rosano.”This is a good acquisition from Crocs. Heydude has been a strong performer during the pandemic, albeit somewhat under the radar,” Matt Powell, senior industry advisor of sports at NPD Group, said.Shares of the Colorado-based Crocs fell about 15% in early trade.”I do think it is a large deal for Crocs and that usually makes investors nervous. I think in the short-term it will have an impact on margins as they merge and streamline processes,” CFRA Research analyst Zachary Warring said. Heydude, founded in Italy in 2008, brings about 43% of its sales from online channels, Crocs said. The company, known for its lightweight casual shoes, is expected to make about $570 million in revenue in 2021.In comparison, Crocs, which brings in 37% of its sales through its e-commerce division, in October forecast its 2021 revenue to grow 62%-65% from the $1.39 billion it recorded last year.Heydude has remained insulated from production constraints caused by factory closures in Vietnam, as it predominantly makes its footwear in China, Crocs Chief Executive Andrew Rees told analysts on a call.However, the brand has been affected by global freight issues and has seen significant delays and elevated costs in terms of getting its products to the United States, he added. More