Sharp decline in global IPO deal value and volume in Q3 but recent listings suggest more deals to come in Q4 2012
- Asia raises the most capital, accounting for 76% of total global IPO proceeds
- Industrials, healthcare and materials most active IPO sectors
Beijing, Shanghai and Hong Kong, 26 September 2012 – Global IPO activity continued to drop in Q3 2012 although; recent listings suggest a market improvement in the coming months, according to Ernst & Young’s latest Global IPO update. So far this quarter, global IPOs have raised US$24.1b, down 46% by capital raised, compared to Q2 2012 (US$44.3b) and down 16% compared to Q3 2011 (US$28.6b). By deal volume, the number of IPOs totaled 165 deals globally in Q3 2012, down from 248 deals in Q2 2012 representing a 33% drop in Q2 2012, and to 291deals for the same period last year (43% decrease).
This quarter, the overall capital raised was boosted by Japan Airlines US$8.5b IPO, which accounted for 35% of total global value in Q3 2012. By fund raised, the top three exchanges in Q3 were Tokyo Stock Exchange, Shenzhen Stock Exchange (12%, US$2.8b in 35 IPOs), and Bursa Malaysia (10%, US$2.4b in 4 IPOs).
Terence Ho, Greater China Strategic Growth Markets Leader at Ernst & Young comments: “We had slow activity over the summer months as well as the postponement of a number of high profile listings this quarter. However, with one major deal in the last couple weeks and two US$1b-plus deals expected shortly, we are more positive that significant investor confidence will return next quarter.”
Robust Asian IPO pipeline
The Asian markets accounted for 76% of global IPO funds raised in Q3 2012, with 102 deals raising US$18.3b compared to 119 deals which raised US$15.8b in Q2 2012. Greater China alone accounted for 35% of deal numbers and 25% by capital raised (58 deals, raising a total of US$6.0b). Compared to the same period last year, Asian exchanges increased their capital raised quarter-on-quarter, but the number of deals declined (136 deals which raised US$13.4b altogether).
Ho comments: “Although, activity in mainland China and Hong Kong was down in the quarter in line with the overall decline in economic growth, some markets, like Malaysia and Singapore are very active, and some sectors, including mining, industrials and healthcare, are pursuing IPOs. The general consensus is that the Asia Pacific is performing better than last year with confidence due to some exceptionally large deals.”
Out of the top 10 global IPOs this quarter, six were listed on Asian stock exchanges. The largest Asian IPOs this quarter were the US$8.5b listing of Japan Airlines Co Ltd on Tokyo Stock Exchange, Malaysia’s IHH Healthcare Bhd which is dual listed on Singapore Stock Exchange and Bursa Malaysia (US$2.1b) and China’s Inner Mognolia Yitai Coal Co Ltd on Hong Kong Stock Exchange (US$0.9b).
“Asia has over 200 companies in the IPO registration pipeline – accounting for more than half of global IPO pipeline. As companies and investors wait for markets to improve, we could expect an uptick in activity in the last quarter of 2012,” said Ho.
Industrials, healthcare and materials most active IPO sectors
In Q3 2012, globally the leading sectors by capital raised were the industrial sector (US$10.6b in 29 deals), which clearly benefited from government stimulus packages across the world. The second most active sector was healthcare (US$2.7b via 8 deals), followed by materials (US$2.3b in 27 deals).
Ho concludes, “Several large IPO deals are expected by end of 2012 and the market continues to be opportunistic and selective. We expect more volume in first half of 2013. Industries to watch include technology, consumer products and industrials sectors.”
IPO activity summary
|Global||Q3 2012||Q2 2012||Q3 2011|
| % |
Down by 16% compared to Q3’11 by capital raised
Down by 43% compared to Q3’11 by deal number
Notes to Editors
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This news release has been issued by Ernst & Young, China, a part of the Ernst & Young global network.