J.P. Morgan Survey Indicates Investor Confidence in Latin American IPOs
NEW YORK--(BUSINESS WIRE)-- According to a survey released today by J.P. Morgans Depositary Receipts (DR) business, 70 percent of institutional investors in North America and Europe who responded to the survey recommend that a Latin American company pursue an initial public offering in todays capital markets. Survey participants, who were interviewed in September 2012, believe that despite significant macroeconomic headwinds in Europe and China, Latin America is a region with steadfast domestic markets and attractively-valued companies that demonstrate significant growth potential.
Each year we survey North American and European institutional investors, with the aim of helping our Latin American clients better understand investor sentiment toward companies in the region, said Candice Teruszkin, Latin America Regional DR Head of J.P. Morgan. The findings from this years survey may help Latin American issuers identify ways to improve their market valuations over time and to better compete for and attract capital needed to fund their growth.
The survey, gathered the opinions of 40 institutional investors based in North America and Europe. These investors held, as of June 30 2012, a combined (approximately) $43 billion, or 16 percent, of actively managed equity in Latin American companies1.
Other notable findings from the survey include:
- The majority of the studys participants believe that the Consumer Goods (65%) and Consumer Services (60%) sectors offer the most attractive investment opportunities, given Latin Americas growing middle class, rising income levels and low domestic unemployment.
- Government intervention and trading liquidity are the two greatest challenges Latin American companies face with respect to maintaining a fair market valuation, according to 38% and 28% of survey participants, respectively.
- A majority of the studys respondents (55%) believe that an ADR program can help a Latin American issuer maintain a fair market valuation, citing the benefits of improved trading liquidity and free float as well as increased exposure to a greater number of potential new investors.
- More than one-third of the investors surveyed (35%) recommend that Latin American companies that do not adhere to international reporting standards do so, as a means to maintain fair market valuation.
For market information on depositary receipts and international equities, please go to www.adr.com. More information on J.P. Morgans depositary receipt services is also available on www.jpmorgan.com/visit/adr.
About the Survey Methodology
On behalf of J.P. Morgans Depositary Receipts Group, Ipreo conducted a telephone survey of global institutional investors from the United States, Canada, the United Kingdom, and several other European countries (Belgium, France, Germany, the Netherlands, Sweden, and Switzerland) in September 2012. In total, Ipreo received feedback from 40 participants who invest in Latin America. As of June 30, 2012, these participants firms managed a combined $807.6 billion in equity assets, $43.0 billion of which represented holdings in Latin American companies, or 16% of all Latin American equities held by active investment managers outside of Latin America.
About J.P. Morgans Corporate & Investment Bank
J.P. Morgans Corporate & Investment Bank is a global leader across banking, markets and investor services. The worlds most important corporations, governments and institutions entrust us with their business in more than 100 countries. With $18.2 trillion of assets under custody and $393 billion in deposits, the Corporate & Investment Bank provides strategic advice, raises capital, manages risk and extends liquidity in markets around the world. Further information about J.P. Morgan is available at www.jpmorgan.com.
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1 According to Ipreo
Allie Libby, +1 212-270-1714
Source: J.P. MorganCopyright Business Wire 2012