Company flotation numbers show recovery in UK
THE UK leads the way in stock market flotations in Europe with 11 companies listing in the first quarter of 2010.
The first three months shows an improved picture on the same period last year, which saw no deals until quarter two 2009.
Moreover, there were more UK stock market flotations in the first quarter than in 2009.
According to Ernst & Young’s Q1 2010 Global IPO update there were 267 deals globally worth $53.2bn compated to 52 deals, which raised $1.4bn in the first quarter of last year – the lowest activity in the past decade.
Asia continued to experience strong activity with 166 initial public offering (IPOs) raising $35.1bn.
Nine of the 20 largest IPOs were from Asia including China, Japan and South Korea.
The largest IPO was Dai-ichi Life Insurance Co, which listed on Tokyo Stock Exchange in March at $11bn.
Other emerging markets such as India completed 20 IPOs listing on the Bombay Stock Exchange, which raised US$1.2bn and Brazil conductedfive IPOs, which raised $3.3bn locally on the Bovespa.
Despite the postponement of a number of high profile listings in January, European investors’ confidence returned later in the quarter with three major deals raising more than $900m each.
Across Europe there were 39 IPOs – the highest number since the second quarter 2008.
Although US firms raised capital with a total value of $4.2bn and 25 deals, both figures represented a decline on the final quarter of 2009.
David Wilkinson, UK IPO leader at Ernst & Young, said: “We expected a significant increase in UK IPO activity in quarter one, but initially it looked like a false start.
“It is clear that it is a buyers’ market and that investors are being choosy about where they put their money. Funds are still available to support the strongest float candidates with realistic pricing.”
He added: “The big cloud that remains on the horizon for the second quarter is the general election. The threat of a hung parliament and the uncertainty it will cause is likely to reduce IPO activity in the second quarter. We expect that in the second half there will be a pickup in UK activity.”
