2010 – The return of the IPO?

Asia leads the way with the RoW on its coat tails

Abchurch MD, Henry H-T draws together some encouraging signs for the global IPO market

According to a report recently issued by Ernst & Young, the global IPO market has begun to show signs of recovery which will come as a relief to most financial intermediaries around the world. In the first quarter of this year there have already been 267 successful IPOs raising a total of US$53 billion, this figure dwarfing the comparative period in 2009 in which there were only 52 IPOs raising a paltry US$1.5 billion. It will come as no great surprise that the return of the IPO in Asia - China in particular - is leading the way, having raised a total of US$19 billion via 109 IPOs, accounting for 41% of all global IPO activity. In the last 24 hours, the Agricultural Bank of China has reported that it preparing for a float looking to raise a staggering US$25 billion which would make it the largest share offering ever, exceeding even the IPO of China’s ICBC which raised US$21 billion back in 2006 when the markets were much more buoyant.

So how has London fared in all of this activity? Well, not too badly when compared against the rest of Europe. London has raised a respectable US$2 billion via 11 IPOs in the period, with companies including Barrick Gold, CPP, Super Group and Promethean successfully joining the market. From a fairly lifeless IPO market in Europe during 2009, there have been 39 floats in the first quarter raising US$8 billion (the largest number since the second quarter of 2008), and this activity has outstripped the US which managed to raise only US$4.2 billion via 25 IPOs.

Whilst there remain some concerns about volatile market conditions at the start of the year, it is widely anticipated that investors will continue to return to the European and North American markets as the global economy improves which will be good news for all of us here in the City. With plenty of activity planned, many corporates and issuers are waiting for the right window of opportunity to complete their listings and to generate the best valuation. Let’s hope the strong start to global IPOs in 2010 continues and starts to filter into London post the General Election.

Henry




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