Global IPO activity has fallen sharply in Q3 2011, according to Ernst & Young’s Q3 Global IPO update.
In Q3’ 11, a total of 284 deals raised US$28.5b, compared with 383 deals worth US$65.6b for Q2’11 (a 26% decrease in number and 57% drop in capital raised).
In Q3’10, a total of 302 IPOs raising US$52.5b, a 6% decrease in number and 46% in capital raised compared to Q3’11. There were only 3 deals raising over US$1 billion in this quarter globally. The global average deal size was US$100m in Q3’11, compared to US$171m in Q2’11.
Twenty-two IPOs have been postponed and 49 withdrawn in Q3’11– there were 20 and 76 respectively for Q2’11, according to Dealogic. This is mainly due to market volatility. However, approximately 9 out of 10 global IPOs1 were priced within or above their initial filing range in Q3’11 – this is similar to Q2’11 and Q1’11.
“The Q3’11 results show that the Eurozone and US debt crisis have had a deep impact on the global IPO market and on both issuers’ and investors’ confidence," says Terence Ho, Greater China Strategic Growth Markets Leader for Ernst & Young.
"There are, however, many very good businesses still waiting to go public. IPOs are still considered by companies as a way of raising capital. They are waiting for market conditions to improve, while continuing to prepare for their IPOs.”
Asia Losing Momentum
Asian issuers continue to dominate IPO activities in Q3’11 with 138 deals, which raised US$13.5b in total (47% of global funds raised). However, this is the lowest level of capital raised by Asian issusers since Q2’09 (US$3.0b in 44 deals).
European issuers completed 69 deals which raised US$8.8b (31% of global funds raised), significantly less than Q2’11 (US$21.7b in 96 deals) while remaining higher than Q1’11 with US$2.4b raised in 52 deals.
North American issuers raised US$4.5b in 41 deals (16% of global funds raised) compared with US$11.6b raised with 55 deals in Q2’11 (18%).
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