Capital Markets

Global IPO Activity Plunges to 13-year Low

But Ernst & Young's report through November show materials, industrials, and tech in the lead in North America.
Stephen TaubDecember 9, 2008

Global activity in the initial public offering arena has fallen to a 13-year low, according to Ernst & Young’s year-end Global IPO update.

Through November 2008 a total of 745 IPOs worldwide raised $95.3 billion in capital, sharply off from the 1,790 offerings in the prior year, raising $256.9 billion. Also this year, 298 IPOs have been postponed or withdrawn in 2008 to date compared with 167 during the full year 2007, E&Y said, citing data from Dealogic.

In the last nadir for IPOs, 374 of them raised only $52.4 billion through November 1995.

“Challenging market conditions have clearly impacted investor confidence and willingness to list at this present time,” said Gil Forer, the accountancy’s global director of IPO initiatives. “But despite a slow-down in actual listings, the pipeline of companies preparing to make the transition from private entity to public enterprise remains robust.”

North American IPOs have raised $27 billion so far this year, while Asian IPOs have generated $29.7 billion — with Greater China accounting for 60 percent of funds raised in that region.

What kinds of companies are going public these days? Looking at the number of deals, the leading sectors are materials (183 IPOs), industrials (105), and high technology (81.) The top three sectors by total capital raised: financials ($26.2 billion), energy and power ($18.3 billion), and materials ($16 billion.)

This year’s top three IPOs by capital raised were Visa Inc., the largest U.S. offering in history, alone raising $19.7 billion on the New York Stock Exchange. It was followed by China Railway Construction Corp Ltd. At $5.7 billion on the Shanghai and Hong Kong stock exchanges, and Brazilian energy company OGX Petroleo e Gas Participacoes SA, coming in at $4.1 billion on the Sao Paulo stock exchange.

Of the top 20 IPOs, 15 have been from emerging markets.

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