Global IPO activity continues to rise in Q2 2011
Despite the slowed down in IPO activity, China sustains lead, Taiwan grows Despite global macro-economic uncertainties in Q2, and that the performance of a few high profile IPOs were under expectation, global IPO fund raised rose by 39% in Q2 compared to Q1 2011. In Q2 2011, 378 IPOs globally raised a total of US$64.6 billion, according to Ernst & Young’s Q2 2011 Global IPO Update.
China sustains lead
Despite a slowed down in IPO activity, China leads global IPO activity in Q2 2011 in both number of IPOs and funds raised. There are 108 Chinese IPOs, raising US$20.4 billion, representing 28.6% and 31.6% of number of deals and funds raised globally, respectively.
In the first half of 2011, the Hong Kong Stock Exchange (HKEx) raised US$23.6 billion in 35 deals, the highest total funds raised in the first half year in the past decade. In Q2 2011, 7 of the global top 20 IPOs are listed in Hong Kong, including Glencore, Prada SpA, Shanghai Pharmaceuticals, MGM China, Hui Xian REIT, Samsonite and Huaneng New Energy.
The Shenzhen Stock Exchange (SZSE), including the SME board and the ChiNext board, recorded 144 deals in the first half of 2011, making it the top stock exchange globally by number of deals.
Taiwan Stock Exchange (TWSE) recorded 13 deals (TDRs included) in the first half of 2011, a 30% increase compared to the same period last year.
James Wang, Chairman & CEO, Ernst & Young Taiwan says: “Both number of deals and funds raised in the A Share market (including both the SSE and SZSE) in the first half of 2011 are less than the corresponding period last year. Chinese IPO activity has slowed down, with investors restrained by Chinese inflationary concerns over commodity prices and housing prices. Even so, the Chinese IPO pipeline is still very strong, containing large state-owned enterprises, and mid-cap companies. IPO activity in Taiwan Stock Exchange (TWSE) was increasing in the first half of 2011 with 13 deals.”
James also says, “We have made outstanding achievement in TDR market. From 2010 to June 2011, Ernst & Young Taiwan has accomplished 5 deals which makes us ranked 1st among competitors, and a 33% market share among deals over NT$ 1 billion. Furthermore, we have helped raise NT$7.64 billion for Digital China, which marks the biggest deal of 2010 in TDR market.”
Future outlook
Ian Wang, Assurance Partner, Ernst & Young Taiwan says: “Despite the continued uncertainty of a global economic recovery, IPO remains at the heart of many companies’ growth strategy. As the global IPO pipeline continues to build up, we expect a strong second half for new offerings from high profile issuers. We also foresee a strong second half for IPO activity in China, and China will continue to lead global IPO activity in 2011.”
Ian says: “There is a strong pipeline of companies having IPO on HKEx. Whether the HKEx may regain its top position in terms of IPO fund raising globally in 2011 will depend on the capital market condition, and whether the biggest social network company in the US will happen in the second half of 2011. HKEx has evolved as a leading stock exchange for cross-border IPOs. In second half of 2011, Chinese mainland companies will still be the major players of IPO activity in Hong Kong. There will also be more cross border IPOs of overseas companies.”
James adds: “A hot topic in the market recently is about speculations on the launching of the Shanghai International Board. The Shanghai International Board is at its final stage, with basic principles set. A few high profile companies are already preparing for a listing on the Shanghai International Board. We believe that the appointment of professional parties, including CICPA, with Chinese security license, is required for a listing on the Shanghai International Board. As a reciprocal arrangement for the H Share companies, we believe the Shanghai International Board will create more business opportunities for the accountants in Greater China area, including Hong Kong and Taiwan.”
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