Global IPO activity up 40% in Q2
2011-07-21 16:20:58
Global IPO fundraising activity rose almost 40 per cent in the second quarter of this year compared to a year ago.
A total of 378 companies launched their IPOs in the second quarter this year and raised a total of US$64.6 billion.
However with looming uncertainties in the global markets, some experts said they don't expect the market to pick up until perhaps the last quarter of the year.
The US$2 billion listing of Italy's luxury fashion retailer Prada in Hong Kong was just one of the IPOs in the second quarter of the year that lifted funds raised in Asia.
Analysts said despite concerns from the earthquake in Japan and the European debt crisis, IPO numbers remained strong globally.
"I think the main reason really is that there is pent-up demand for capital from companies - I think companies still look at IPO as a key strategy for growth. The other thing that we really saw in Q2 is that out of the top 20 IPOs, half of them were private equity or venture capitals backed, so it is really all these investors now cashing out and bringing all these companies to IPO," said Max Loh, Country Managing Partner, Singapore, Ernst & Young LLP.
Ernst & Young added that Asian exchanges still lead the way among global IPOs. But they have lost some dominance in the second quarter.
The Hong Kong Stock exchange raised US$11.3 billion in deals, while Shanghai and Shenzhen stock exchanges raised a combined US$10.3 billion in 77 deals.
However with uncertainty hanging over the second quarter of the year, market watchers expect the slowdown to trickle into the third quarter IPO numbers.
"It will affect third quarter to a certain extent, some companies may push back some of their IPO listings. I think a lot of these postponed IPOs will start to come back in the fourth quarter, so we will see a substantial pick-up in IPO in the fourth quarter," said Wong Sui Jau, GM of fundsupermart.com.
Going forward, analysts said they are still excited about social media IPOs, and expect a number of energy-based companies to come to the global market.