BDO Report: Foreign Company IPOs to Lead U.S. Issues
Asia seen as big source of new public offerings on U.S. exchanges
January 26, 2010
If the predicted boom in the U.S. IPO market materializes, foreign businesses will represent an increased percentage of new issues on U.S. exchanges this year, according to the results of a recent survey.
A majority of market participants surveyed, 52%, expect increased U.S. IPO issuance to come from overseas, with Asia was as a major source of foreign-based IPOs, the survey of investment bankers conducted by BDO found.
More than a quarter of bankers, 28%, see foreign source IPOs remaining stable and 20% anticipate a decrease.
“Clearly, the capital markets community expects foreign-based businesses to play a larger role in terms of offerings on U.S. exchanges in 2010,” Lee Graul, a partner in the BDO Capital Markets Practice, said in a statement. “Asia, the world’s fastest growing region, is specifically seen as the greatest source for this IPO activity."
Almost three-quarters of bankers surveyed, 73%, said Asia would likely be the source of the most foreign IPOs, trailed by Central and South America and Europe.
Forty-four percent of respondents said U.S. IPOs will produce an increased percentage of total global IPO proceeds in 2010, while 30% said the U.S. share of IPO proceeds to remain flat. One-quarter said the percentage will decrease.
Of the one in four bankers who expect the U.S. share of global IPO proceeds to shrink, 42% said increased federal regulation will be the greatest deterrent among foreign businesses to list their companies on U.S. exchanges; 38% said the high cost of raising capital in the U.S. will be the greatest deterrent to a U.S. IPO.
For IPOs on foreign exchanges, Asia was seen as the most likely region to produce new issues. More than a third of bankers, 36%, said Hong Kong's exchange will be the most popular for foreign IPOs in 2010, while more than a quarter, 27%, chose Shanghai's exchange.
The survey, which polled 100 capital markets pros, was conducted in December 2009.
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