Africa News Line Thursday, 06.01.2023, 12:46 PM
Welcome Guest | RSS
Site menu

Main » 2012 » December » 12 » Global IPO Activity Expected to Pick up in Second Half 2013 Driven by the US according to Ernst & Young
10:31 AM
Global IPO Activity Expected to Pick up in Second Half 2013 Driven by the US according to Ernst & Young
LONDON - Wednesday, December 12th 2012 [ME NewsWire]

    Q4 sees improved activity in US and Europe but 2012 activity down 30% on 2011
    Real estate, oil and gas, infrastructure and healthcare to become more active in 2013
    US stock exchanges ahead of Greater China this year

(BUSINESS WIRE)-- After a slow start to 2012, momentum lifted in the second quarter, but significant macroeconomic volatility and changes in political leadership in many parts of the world, weighed on global IPO activity for the remainder of the year. In the year to date, the amount of capital raised globally is down by 30% at US$118.5b. The number of deals is also down by 37% (768 IPOs), compared to full year 2011 (1,225 deals, US$170b). However, another 50 companies, with a combined deal value of around US$6.0b are expected to list by the end of December, according to Ernst & Young’sYear-end Global IPO update.

Maria Pinelli, Ernst & Young’s Global Vice Chair Strategic Growth Markets says: "The weakening economy, unstable equity market conditions and poor performances on some IPO transactions undoubtedly impacted investors’ confidence.”

Q4 2012 sees improved activity in US and Europe

This quarter, the US markets raised US$7.3b (29 IPOs), narrowing the lead on the Asian markets, which raised US$8.8b (59 IPOs). European exchanges also saw something of a return to form, with deal value reaching US$7.0b (20 IPOs). Globally, year-on-year, the picture for Q4 remains somewhat depressed. The number of deals fell 46% from 255 deals in Q4 2011 to 136 deals in Q4 2012, whereas by capital raised, it only fell 6% from US$29.1b in the same period last year to US$27.3b this quarter.

Continues Pinelli, "As expected, there has been lower IPO activity in Asia as the number of state owned enterprises (SOEs) coming to market has diminished. The fourth quarter figures show that the US IPO market is back by deal number and rewarding companies that perform strongly. Europe has significantly increased activity in the fourth quarter, compared to the rest of the year.”

Technology, financials and industrials were the most active sectors in 2012

The leading sectors by capital raised in 2012 were technology (US$23.2b via 112 deals), financials (US$18.0b via 46 deals) and industrials (US$17.2b via 112 deals). Energy and materials sectors also stood out by capital raised (ranked 4th and 5th). Pipeline data suggests these sectors should continue to drive activity in 2013.

Pinelli comments: "Looking ahead to 2013, we believe that the real estate sector is also set to be more active, due to increased investor interest ahead of a possible rebound in this sector. Oil and gas also looks set to become a more dynamic sector in the US and Europe. Other sectors to watch include infrastructure and healthcare, where investment is expected to occur.”

US stock exchanges ahead of Asia

The NYSE and NASDAQ exchanges raised US$44.9b in 128 deals, and NYSE raised 19% of global proceeds in 2012; leading the Shenzhen, Hong Kong and Shanghai stock exchanges (US$11.1b via 129 deals, US$9.8b via 44 deals, US$5.3b via 25 deals respectively) for a second consecutive year.

Pinelli says: "Market and investor confidence is building, the employment picture is improving and the housing market is seeing a return to form. Despite exceptional weather conditions, political uncertainty, a closed market for several days and concerns over the impact of the fiscal cliff, the US market is active.

"We are continuing to see companies sell smaller stakes (10% to 20%) for a longer term financing strategy, with the view to raise further capital with one or two follow-on offerings. We believe that Q1 2013 will start cautious, but we anticipate that by June 2013 we will be looking at a higher level of activity in the US and a strong pipeline of deals coming to market.”

Greater China IPO market taking a pause as confidence weakens

Activity in Greater China in 2012 tailed off as the three-year run of sales of large (SOEs) came to an end. "The after-market in Greater China in particular has been depressed and across Asia investment confidence is weak with investors holding back” says Pinelli. "Although the Greater China market has seen signs of improvement in the past week – thanks to the People’s Insurance Co of China Ltd. raising US$3.1b, (the largest deal on HKEx this year) – Chinese and foreign companies into China are currently finding it difficult to complete their IPOs, as investors are showing signs of scepticism in this market.”

The Asian exchanges only completed 383 deals which raised US$51.5b, down 41% by capital raised compared to 2011 (610 IPOs, raising US$88b). Other active stock exchanges included, Bursa Malaysia, raising US$7.6b with three of the year top 20 deals, the HKEx (US$9.8b in 44 deals), and the Shanghai and Shenzhen Stock Exchanges (SME and ChiNext), raised US$16.4b in 154 deals in total.

European stock exchanges started picking-up

European exchanges saw a 63% decline in capital raised (US$11.1b raised in 147 IPOs) in the first 11 months of 2012, compared to 2011 full year (US$29.7 raised in 266 deals). However, the top three largest European IPOs so far this year all happened in Q4 2012. The London Stock Exchange raised the most capital (US$3.9b in 7 deals) with 57% of capital raised coming from Russian issuers. Deutsche Börse AG ranked second (US$2.4b in 11 deals) and Euronext ranked third (US$1.5b in 9 deals).

Pinelli comments: "While the European economic environment is still very difficult, confidence is starting to rebuild and many companies are now looking to plan an IPO in the second half of 2013. Recent IPOs, such as Telefonica Deutschland Holding AG and Direct Line Insurance have reinserted some confidence back in listings on the European exchanges.”

2013 will see improved IPO activity

Pinelli concludes: "Looking ahead to 2013, we expect a better outlook, with a strengthening US economy leading the recovery, followed in the latter half of the year by Europe and Asia. Reduced stock market volatility, assertive action from central banks and brighter economic prospects suggest 2013 could be the right time for companies currently in the pipeline to list.

"The US, Toronto, London, Frankfurt, and Moscow stock exchanges lifted significantly in the fourth quarter, thus suggesting that signs of stability in equity markets and supportive central bank policy are starting to take effect. We believe the market is likely to see smaller offerings initially while market and investor confidence builds. As the global IPO marketplace ceases to be characterized by the sale of SOEs, whichever economy provides the most effective support to commercial, entrepreneurial businesses will become the largest capital market in the world.”

Notes to Editors

About Ernst & Young’s IPO offering

Ernst & Young thrives on helping companies to deliver successful initial public offerings (IPOs). Our strategic growth markets professionals, who are dedicated to serving future market leaders worldwide, help businesses like yours evaluate the pros and cons of an IPO. We demystify the process, examine the alternatives and help prepare you for life in the public spotlight. Our Global IPO Center of Excellence is a virtual hub which provides access to our IPO knowledge, tools, thought leadership and contacts from around the world in one easy-to-use source.

About Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 167,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit

This news release has been issued by EYGM Limited, a member of the global Ernst & Young organization that also does not provide any services to clients.


Ernst & Young Global Media Relations

Mélodie Deniz, +44 (0)20 7980 0475
Views: 298 | Added by: africanewsline | Rating: 0.0/0
Total comments: 0

Entries archive

«  December 2012  »