Global IPO activity falls 44 percent in third quarter compared with year earlier, Renaissance says

Chinese economic slowdown and Europe crisis also see overall proceeds drop 9 percent, despite large IPOs

Global IPO issuance fell in the third quarter, despite a couple of large offerings and an increase in North American proceeds, as economic growth in China slowed and the European sovereign debt crisis discouraged activity in Europe, according to Renaissance Capital.

Proceeds from IPOs worldwide dropped to $20.7 bn in the third quarter of 2012, 9 percent lower than the $22.9 bn raised during the same period last year, according to Renaissance’s Global IPO Market Third Quarter 2012 Review.

In terms of number of deals, IPO activity dropped 44 percent to 34 in Q3 2012 from 58 in Q3 2011. The median deal size, meanwhile, grew 3.7 percent to $202.2 mn.

‘The drop in global IPO activity was due to a very slow quarter in Asia where activity dropped 53 percent from last year,’ Renaissance writes in its review.

‘The historically active Hong Kong Exchange listed only three IPOs larger than $100 mn, as issuers in the region grappled with poor stock market returns and increased exchange-imposed regulations. Europe, Latin America and the Middle East and Africa have struggled to gain issuance momentum so far this year, combining to raise just $905 mn.’

Activity in Asia in the third quarter was boosted by the $8.5 bn offering of Japan Airlines and the $1.9 bn IPO of Malaysia’s IHH Healthcare.

Still, overall Asian IPO activity in the quarter fell to 17 offerings, from 36 in the third quarter of last year. The larger IPOs this year, however, ensured that proceeds from IPOs in Asia increased to $14.6 bn in Q3 2012, from $12.7 bn in Q3 2011.

In Europe, IPO activity nearly halted in the third quarter of 2012, with one offering and proceeds of $200 mn. That compares with six offerings and proceeds of $6.4 bn in the third quarter of 2012.

The sharp slowdown is a consequence of the European sovereign debt crisis, Renaissance says, as companies seek better timing for IPOs.

North American activity and proceeds were boosted by the $2.9 bn IPO of Santander Mexico, the second-largest offering in the world in the third quarter, which was carried out mainly in New York.

Overall IPO proceeds in North America increased, with 13 deals valued at $5.3 bn, from 14 deals with total proceeds of $3.3 bn.

In terms of dollar value, the Tokyo Stock Exchange led world exchanges in IPOs in the third quarter because of the $8.5 bn Japan Airlines deal – the only offering through the TSE.

The NYSE came second, with 10 offerings totaling $4.7 bn, and Bursa Malaysia was third, with $2.2 bn.

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