Global IPO activity should remain on a firm footing in the first quarter of 2014, following a strong uptick in listings in the last quarter of 2013 to close the year with a total of 864 deals raising around US$163 billion, according to EY Global IPO Trends: Q4 20131. Increased investor confidence and better market fundamentals will support a solid start to 2014 for new offerings.
“2013 marks the end of a two-year decline in IPO activity," says Ringo Choi, EY’s Asia-Pacific IPO Leader. "The improving macroeconomic backdrop, easing global monetary conditions, reduced political uncertainty and rising investor confidence in key markets saw the banner year end on a high that exceeded expectations.”
“The stage is set for this momentum to continue across all regions and we expect strong levels of activity in the US and Europe with private equity continuing to be a key driver – 2013 saw 182 PE-backed deals raise US$56.4 billion, accounting for 35% of global proceeds. In Greater China, the imminent re-opening of the mainland China exchanges in Q1’14 will bring a pipeline of over 700 companies in the queue for approval, that will act as a catalyst for further activity across the region.”
Greater China IPOs set to take off in 2014 as mainland China reopens
“Despite the freeze in IPO activity in mainland China, with listings suspended since late-2012, Greater China has seen high levels of activity in 2013 with Hong Kong seeing an increase in the number of deals and total funds raised, a trend that is set to continue into 2014,” says Jacky Lai, EY’s Assurance Partner.
“Total funds raised in Hong Kong in 2013 is expected to be HK$162b, up 80% from HK$90b last year. The Hong Kong Stock Exchange ranked second globally by total funds raised, after the New York Stock Exchange. The number of IPOs increased by 60% to 96 deals, from 60 in the previous year.”
A bright future
E&Y expects an influx of mainland China IPOs in 2014 and beyond, with the first batch of over 50 companies getting approval from the regulator for listing as early as January 2014.
"In Hong Kong, we expect to see more IPO activities in 2014, building on strong momentum in 2013 and a number of significant spin-offs of local Hong Kong companies to improve shareholders’ value. Sectors which will lead the way include the financials, technology, real estate and healthcare sectors,” says Choi.