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Global IPO Proceeds to Reach Record High in 2010

Wednesday, 8 Dec 2010 | 9:59 AM ET

Funds raised through global initial public offerings (IPOs) are expected to exceed $300 billion in 2010, a new record high, according to an Ernst & Young report released on Wednesday.

IPO Proceeds to Reach Record Highs in 2010
Funds raised through global IPOs are expected to exceed $300 billion in 2010, a new record high, driven by Asian issuers, according to a report by Ernst & Young. Julie Teigland, EMEIA head of strategic growth markets at Ernst & Young said: â??Continue to bet on Asia. The growth markets there are really coming out strongâ?.

The increase has been driven by Asian issuerswho raised more capital than ever before, while Europe will have seen 223 IPOs in 2010, a 526 percent surge from 2009.

Julie Teigland, EMEIA head of strategic growth markets at Ernst & Young told CNBC 2011 would be another strong year for IPOs.

“Continue to bet on Asia. The growth markets there are really coming out strong,” Teigland said.

“It’s amazing that the Asian markets took over 66 percent of the transactions for 2010 up until November. We don’t see any change for that in 2011,” she said.

The pick-up in IPO activity reflects the economic recovery, according to Teigland.

In the first 11 months of 2010, IPOs worldwide have already raised $255.3 billion in 1,199 deals, Ernst & Young said in the report.

Records Set in Asia

The $22.1 billion privatization of the Agricultural Bank of Chinawas the world’s largest IPO ever, and made up 9 percent of total IPO value globally this year, the report said.

Its proceeds surpass the $21.9 billion raised by the previous IPO record holder, another Chinese state-owned bank,ICBC.

The fourth quarter of 2010 saw both the second- and third-largest IPOs of the year: the IPO of the Asian life insurance unit, in Hong Kong and the privatization of US carmaker General Motors after a historic bailout by the US government, Ernst & Young said.

Together, these deals made up around 25 percent of the total capital raised in 2010, Ernst & Young said.

Teigland said many European or US-based companies feel that having an Asian listing raised their profile and market awareness.

“The positives that we’ve seen in the fourth quarter in the US will hopefully spill over to Europe,” she added.

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