China Leads Global IPO Activity To Record High in 2007
Global initial public offering (IPO) activity has reached a record high this year, paced by emerging countries, especially China, according to figures from Ernst & Young.
Capital raised hit at an all-time high and the number of companies choosing to go public in the first 11 months of this year exceeded the whole of 2006,
From January through November 2007, $255 billion was raised globally through 1739 IPOs – compared to $246 billion raised in 1729 deals in the whole of 2006. The year-end spike in IPO activity seen in 2006 looks likely to be repeated in 2007 with preliminary data for the first two weeks of December indicating a further $18 billion raised in 91 IPOs.
This record level of activity has been achieved despite the absence in 2007 of the mega-deals seen in recent years. The largest IPO of 2007 to date was Russia’s VTB Bank, which raised $8.0 billion, some way short of Chinese bank ICBC’s $22 billion, the largest IPO of last year.
Despite ongoing market uncertainty, the pipeline of IPO-ready companies looking to list in 2008 looks healthy, especially across the emerging markets.
IPO activity continues to be driven by the emerging markets, which accounted for the majority of the largest deals of the year – 14 out of the top 20 IPOs, compared with nine of the top 20 in 2006. By industry, financial companies continue to dominate, representing one-quarter of all funds raised. Industrial and real estate also accounted for some of the biggest deals of 2006.
Brazil, Russia, India and China – the so-called BRIC countries – have raised $106.5 billion in 382 deals so far this year, compared with $89.6 billion raised in 302 deals in the same period of 2006. Of that group China generated more IPOs (209) than Russia, Brazil and India combined (173).
Worldwide, China, the US and Brazil were the market share leaders by capital raised with $52.6 billion, $38.7 billion and $29.0 billion raised respectively. China also led the way in terms of the number of listings with 209, ahead of Australia and the US with 189 and 178 IPOs respectively.
Asia-Pacific accounted for 46% of IPOs worldwide, ahead of Europe, the Middle East, and Africa (EMEA) with 35%, and North America with 14%. EMEA and Asia-Pacific have the greatest market share of capital raised with 38% and 32% respectively, eclipsing North America (16%) and Central & South America (14%).
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