Global IPO market activity is expected to
continue to grow in 2011, according to a report by Ernst &
Young (E&Y).
The report, Global IPO trends 2011,
found the key drivers of the global IPO market this year have
continued to grow from last year for emerging markets,
state privatisations, multinational company spin-offs and companies
in the energy, industrial, materials and technology sectors.
Ernst & Young also found companies are
ramping up their capitalisation to record levels mainly to support
future acquisitions, which is a reflection of growing investor
confidence around equity valuations and sharpened risk
appetites.
Geographical highlights expected in 2011
include:
- In Asia, China is set to maintain its
five-year-long leadership of global IPO markets with Hong Kong
expected to remain the world IPO leader and raise more than US$50
bn in 2011; - In the Americas, the US has a growing backlog
of about 150 companies which are expected to raise around US$40
billion. These include private equity, venture capital backed
companies, fast-growth companies in technology, health care and
real estate, companies based in China, large company spin-offs and
US companies backed by money from the Troubled Asset Relief
Program; and - In Europe, the UK pipeline of potential IPO
candidates remains strong. Numerous cross border listings on the
London Stock Exchange are expected, most notably from emerging
market-facing companies. Europe’s financial institutions, including
spin-offs from over-leveraged banks, could be the source of the
largest IPO prospects.
In the Middle East and Africa, E&Y reports
the IPO outlook remains dim as many companies are wary of listing
discouraged by “poor valuations, sluggish GDP growth prospects and
political unrest.”
