Global IPO activity slows to just 50 IPOs worldwide in 1Q 2009
7 April 2009
Global activity for initial public offerings (IPO) is continuing to slow, with just 50 IPOs worldwide in the first quarter of this year.
According to Ernst and Young, these 50 IPOs raised only US$1.4 billion in capital for the period between January 1 and March 31.
In the last quarter of 2008, about 80 companies were listed worldwide, raising about US$2.6 billion.
Ernst & Young said only two deals raised over US$100 million.
The top three global IPOs by capital raised were US consumer staples company Mead Johnson Nutrition, Chinese firm Real Gold Mining and Saudi company, Etihad Atheeb Telecommunications Company.
These three accounted for 75 per cent of capital raised during the first quarter of this year.
Ernst and Young said IPO activity has fallen sharply year-on-year.
It added that the deal threshold required to make the top 20 IPO list has also dropped significantly over the past year.
In the first quarter of last year, companies would have to raise at least around US$127 million to make it to the top 20 list, but all they needed in the first quarter this year was around US$6.8 million.
Ernst and Young expects the IPO markets to take a much longer time than what most people have predicted to recover.
Said Ernst & Young Assurance Partner and IPO leader in Singapore, Max Loh: “The timeframe for recovery of the IPO markets looks to be much longer than people initially thought a year ago. I feel it will require at least two to three quarters of macroeconomic stability and for confidence to be re-built.
“There are, however, many quality companies from both developed and emerging markets which have delayed or deferred their public listings. These companies continue to ready themselves to go public while waiting for market conditions to stabilise. So when the markets open and valuations improve, these companies will be poised to take advantage.”
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Global IPO activity slows to just 50 IPOs worldwide in 1Q 2009
7 April 2009
Global activity for initial public offerings (IPO) is continuing to slow, with just 50 IPOs worldwide in the first quarter of this year.
According to Ernst and Young, these 50 IPOs raised only US$1.4 billion in capital for the period between January 1 and March 31.
In the last quarter of 2008, about 80 companies were listed worldwide, raising about US$2.6 billion.
Ernst & Young said only two deals raised over US$100 million.
The top three global IPOs by capital raised were US consumer staples company Mead Johnson Nutrition, Chinese firm Real Gold Mining and Saudi company, Etihad Atheeb Telecommunications Company.
These three accounted for 75 per cent of capital raised during the first quarter of this year.
Ernst and Young said IPO activity has fallen sharply year-on-year.
It added that the deal threshold required to make the top 20 IPO list has also dropped significantly over the past year.
In the first quarter of last year, companies would have to raise at least around US$127 million to make it to the top 20 list, but all they needed in the first quarter this year was around US$6.8 million.
Ernst and Young expects the IPO markets to take a much longer time than what most people have predicted to recover.
Said Ernst & Young Assurance Partner and IPO leader in Singapore, Max Loh: “The timeframe for recovery of the IPO markets looks to be much longer than people initially thought a year ago. I feel it will require at least two to three quarters of macroeconomic stability and for confidence to be re-built.
“There are, however, many quality companies from both developed and emerging markets which have delayed or deferred their public listings. These companies continue to ready themselves to go public while waiting for market conditions to stabilise. So when the markets open and valuations improve, these companies will be poised to take advantage.”
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