Global IPO fund raising in 2011 down 45 pct
2011-12-14 15:23:51
The capital raised through initial public offerings (IPOs) worldwide so far this year totaled 155.8 billion U.S. dollars, down 45 percent from the full-year amount for 2010, international auditing firm Ernst & Young said on Wednesday.
These funds were from 1,117 listings worldwide, down 20 percent, largely reflecting a slowdown in the third quarter and the rising concerns from the debt issues in the eurozone and the United States. Some 72 percent of the capital was raised in the first six months of the year.
"After a promising start in the first two quarters, IPO activity dropped dramatically midway through the year, principally due to investors concerns about sovereign debt issues in Europe and Standard & Poor's downgrade of U.S. credit rating," it said.
Ernst & Young projected a total of 170 billion dollars raised through IPOs for the full year. This would represent a fall of 40 percent year on year.
Asian exchanges completed 543 deals in the first 11 months of the year to raise 77.7 billion dollars, down 56 percent from the full year amount last year. The largest IPO on Asian exchanges this year was the 5.5 billion dollars listing of Hutchison Port Holdings on the Singapore Exchange, followed by Italian fashion house Prada SpA on the Hong Kong bourse for 2.5 billion U.S. dollars.
The Hong Kong exchange raised 19.6 billion U.S. dollars in 53 deals, while the Shanghai and Shenzhen stock exchanges raised 40.8 billion dollars in 262 deals altogether.
IPO activity on U.S. exchanges held up relatively well with a modest drop of 16 percent in capital raised to 36.4 billion dollars so far this year. IPOs on European exchanges accounted for 19 percent of the world total with a value of 29.6 billion dollars.
Last year saw the largest PE (private equity)-backed IPO ever with the 4.3 billion dollars raised by America's largest hospital chain operator HCA Holdings in March on the New York Stock Exchange. Globally, PE-backed IPOs companies exited 168 companies, raising around 37 billion dollars.
Ernst & Young said there are now more than 95 PE-backed companies registered to go public, which could raise a total of more than 20 billion U.S. dollars.
"With PE portfolio aging rapidly, sponsors are looking closely for any indication that the IPO window is reopening," said Jeff Bunder, global private equity leader at Ernst & Young.
Max Loh, country managing partner at the firm, said Asian exchanges led by Shanghai, Shenzhen, Hong Kong as well as South Korea and Singapore will continue to be attractive platforms for IPO aspirants.
He said the key to the IPO market recovery lies in the speedy resolution of the European debt crisis.
"Many fast growing companies will continue to look at IPOs as a way of raising capital and remain at the heart of their growth strategies," he said.