Online brokerage E*trade is to offer direct access to European initial public offerings (IPO) through a new International Capital channel. The venture has been selected by HSBC to distribute shares in the forthcoming Orange IPO to retail clients in the UK.
Initially available to UK investors, E*Trade International Capital services will be rolled out in several European countries during the first half of 2001.
Stephen Murphy, managing director of E*Trade International Capital says: "With operations in four European markets and others planned, E*Trade is well positioned to become a leading pan-European online distribution channel for IPOs. We are working very closely with investment banks to win IPO allocations for E*Trade clients, and to ensure that the banks are given access to clients in the retail sector."
Recent research from Schroder Salomon Smith Barney projects a potential record $185 billion in European equity offerings in 2001. E*Trade proprietary research on its US client base indicates that for every share purchased in an IPO E*Trade clients buy a further 3.5 shares in the secondary market. The company is projecting a similar trading pattern in Europe.
E*Trade will be competing for deal flow with UK-based EO which recently launched a European IPO Centre on the Charles Schwab Web site.