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Thursday 8 October 2009
China leads global IPO rebound
The number of initial public offerings (IPOs) rebounded sharply across the globe in the third quarter, led by mega-deals in China, as companies capitalised on rallying stock markets and growing optimism among investors.
Report shows Q3 spurt; Chinese firms account for 63% of global IPO value
By Yang Huiwen 07 October 2009
The number of initial public offerings (IPOs) rebounded sharply across the globe in the third quarter, led by mega-deals in China, as companies capitalised on rallying stock markets and growing optimism among investors.
Singapore played its part in the rally, with six IPOs in the third quarter worth about US$800 million (S$1.1 billion), making it the fourth-biggest listing market in Asia for the three months to Sept 30.
Companies all over the world raised a total of US$37.8 billion via IPOs in the third quarter, the largest since the second quarter last year and almost four times the US$9.6 billion raised in the second quarter this year, according to an Ernst & Young report.
Global IPO activity, however, remains at a six-year low in the first nine months of the year, with firms raising US$49 billion - down from US$92 billion in the same period last year.
China companies dominated the market for new listings in terms of deal numbers and sizes in the third quarter, with 62 firms accounting for 63 per cent of total IPO value globally.
Seven of the 10 largest IPOs came from China, with China State Construction Engineering topping the list. It is also the world’s largest listing this year. It listed on the Shanghai Stock Exchange in July, raising US$7.3 billion.
Metallurgical Corporation of China was next, with US$5.1 billion, and Wynn Macau was third, with US$1.63 billion.
‘It has been a remarkable quarter for the IPO market in Asia and, in particular, for China,’ said Mr. Gregory Ericksen, Ernst & Young’s global vice-chairman of Strategic Growth Markets.
The Asia-Pacific accounted for about 80 per cent of the global IPO market, both in terms of deal size and capital raised.
Improved economic conditions, the deployment of various stimulus plans, stronger performance of global equity markets and investor optimism led to the increase in IPO activity, said Ernst & Young.
It expects ‘another strong quarter for the IPO market in Asia’, but the same cannot be said about Europe.
Europe is still suffering from a drought in new listings and is unlikely to see a pick-up until next year, the report said.
The Middle East, Europe and Africa accounted for just 3 per cent of total capital raised in the third quarter, compared with a 44 per cent share in the same period last year.
Ernst & Young sees ‘a cautious but substantive improvement in IPO sentiment’ for the United States, as risk appetite returns.
‘This doesn’t quite feel like a dead cat bounce, but neither is it a universal recovery in global IPO markets,’ said Mr. Ericksen.
He added that ‘questions will remain about the health of the recovery’ until confidence returns to European markets, and global markets start to function properly.
There will also be ‘an excessive reliance on a handful of large Chinese listings to prop up the overall numbers’, he said. ‘So for now, it remains cautious optimism.’
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China leads global IPO rebound
Report shows Q3 spurt; Chinese firms account for 63% of global IPO value
By Yang Huiwen
07 October 2009
The number of initial public offerings (IPOs) rebounded sharply across the globe in the third quarter, led by mega-deals in China, as companies capitalised on rallying stock markets and growing optimism among investors.
Singapore played its part in the rally, with six IPOs in the third quarter worth about US$800 million (S$1.1 billion), making it the fourth-biggest listing market in Asia for the three months to Sept 30.
Companies all over the world raised a total of US$37.8 billion via IPOs in the third quarter, the largest since the second quarter last year and almost four times the US$9.6 billion raised in the second quarter this year, according to an Ernst & Young report.
Global IPO activity, however, remains at a six-year low in the first nine months of the year, with firms raising US$49 billion - down from US$92 billion in the same period last year.
China companies dominated the market for new listings in terms of deal numbers and sizes in the third quarter, with 62 firms accounting for 63 per cent of total IPO value globally.
Seven of the 10 largest IPOs came from China, with China State Construction Engineering topping the list. It is also the world’s largest listing this year. It listed on the Shanghai Stock Exchange in July, raising US$7.3 billion.
Metallurgical Corporation of China was next, with US$5.1 billion, and Wynn Macau was third, with US$1.63 billion.
‘It has been a remarkable quarter for the IPO market in Asia and, in particular, for China,’ said Mr. Gregory Ericksen, Ernst & Young’s global vice-chairman of Strategic Growth Markets.
The Asia-Pacific accounted for about 80 per cent of the global IPO market, both in terms of deal size and capital raised.
Improved economic conditions, the deployment of various stimulus plans, stronger performance of global equity markets and investor optimism led to the increase in IPO activity, said Ernst & Young.
It expects ‘another strong quarter for the IPO market in Asia’, but the same cannot be said about Europe.
Europe is still suffering from a drought in new listings and is unlikely to see a pick-up until next year, the report said.
The Middle East, Europe and Africa accounted for just 3 per cent of total capital raised in the third quarter, compared with a 44 per cent share in the same period last year.
Ernst & Young sees ‘a cautious but substantive improvement in IPO sentiment’ for the United States, as risk appetite returns.
‘This doesn’t quite feel like a dead cat bounce, but neither is it a universal recovery in global IPO markets,’ said Mr. Ericksen.
He added that ‘questions will remain about the health of the recovery’ until confidence returns to European markets, and global markets start to function properly.
There will also be ‘an excessive reliance on a handful of large Chinese listings to prop up the overall numbers’, he said. ‘So for now, it remains cautious optimism.’
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