Global IPO market soars in first quarter

Market will likely continue growing for rest of the year, Renaissance predicts

Global IPO proceeds rocketed in the first quarter of 2014 on recovery in Europe and the return of the Chinese market.

Proceeds rose 77 percent to $34.1 bn in the first three months of the year, with Asia and Europe accounting for about three quarters of the total market, according to IPO research firm Renaissance Capital. The company predicts further acceleration in the IPO market for the remainder of the year.

‘Asia-Pacific’s total was boosted by the return of the China A-share market which raised $3.3 bn in just one month before shutting down once again due to accounting quality concerns and the impending threat of a Chinese debt crisis,’ notes Renaissance Capital in its quarterly IPO review. ‘The European markets continued their recovery as IPOs from a variety of exchanges in the region combined to raise $12 bn, with particularly strong activity in London.’

In terms of cash raised, the US market takes the lead, raising a total of $8.3 bn, according to Renaissance data. Hong Kong places second at $5.5 bn, followed closely by the UK, which raised $5.3 bn. Japan is next at $4.6 bn and mainland China comes fifth at $3.4 bn. The combined proceeds from Hong Kong and mainland China totaled $8.9 bn, easily surpassing the US.

The US also leads in terms of the number of IPOs filed, at 27. Mainland China comes next, with 16 IPOs, followed by the UK with 12, Hong Kong with eight and Japan with four. Globally, the number of IPOs carried out in the first quarter of 2014 jumped 93 percent from the same quarter last year.

‘Despite weak performance from emerging market IPOs, global IPOs generated a 20 percent average return thanks to the strong performance of China A-Share and US IPOs,’ the quarterly Renaissance report says. ‘With IPOs outperforming in developed markets, we expect to see strong issuance continue for the remainder of 2014.’

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