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Ernst & Young: 2007 US IPO Market Sees Impressive Activity
Research says 2007 IPO market expected to surpass 2006 performance
December 24, 2007
This year’s US initial public offering market was the most robust new issues market in the last five years, according to new research from Ernst & Young.
Jackie Brya, Ernst & Young IPO leader for the Americas, said the healthcare sector was the IPO industry-leading segment that accounted for 20% of the total number of new issues, while financial services IPOs generated 33% of IPO transaction volume. "We expect to see the US IPO markets beat last year's totals," Brya said.
There was an increase in the number of foreign companies that listed on US exchanges, representing 21% of new issues in the US. From foreign countries there were 25 Chinese companies, mainly technology businesses, which chose to list on US exchanges like the Nasdaq and New York Stock Exchange.
Meanwhile, global IPO activity attained record levels in 2007 with $255 billion raised from 1,739 IPOs on a global basis from January through November 2007. Both the number of IPOs and volume raised this year has surpassed 2006 levels, which amounted to $246 billion from 1,729 new issuances.
The IPO by Russia's VTB Bank, which raised $8 billion, marked the year’s largest new issuance, or $14 billion less than Chinese bank ICBC’s $22 billion IPO in 2006.
Emerging markets continue to fuel IPO activity with Brazil, Russia, India and China, which have been labeled the "BRIC" countries given their economic production capacity, have raised $106.5 billion in 382 IPOs this year, compared with $89.6 billion raised in 302 deals in the same period of 2006. Of that group China posted the largest number of IPOs with 209 listings, compared with Russia, Brazil and India, which generated 173 IPOs on a combined basis.
The Asia-Pacific region accounted for 46% of global IPOs, outpacing Europe, the Middle East and Africa, which made up 35% of worldwide new issuance activity, while North America comprised only 14%.
The Hong Kong Stock Exchange raised the most capital this year, or a 13% market share, driven by large issuances, including China CITIC Bank and China Railway, whereas the New York Stock Exchange ranked second with 3.6% of the year’s total listings to date.
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