says PricewaterhouseCoopers IPO Watch Europe survey
5 July 2006 Press release
2005 was a record year for European IPO activity in terms of international offerings, the number of IPOs and total offering value, according to IPO Watch Europe 2005 - a PricewaterhouseCoopers survey that tracks the volume and value of IPOs around Europe. Europe saw a surge of IPO activity in both volume and value terms. The number of European IPOs increased by 39% from 433 in 2004 to 603 in 2005. New money raised in 2005 of 51 bn euro represents almost double the amount raised in 2004 (28bn euro).
CIS IPOs
2005 has been also a record year for CIS IPO activity with about $5 bn raised. Russia has the largest share of IPO activity in both volume and value terms. However, in terms of number of IPOs in Europe, CIS is still falling behind the leaders of IPO activity: Indian, Australian and Israeli companies dominated with 32, 16 and 14 IPOs respectively.
Sistema AFK, Novatek, Pyaterochka , NLMK and Evraz Group counted among the top five CIS IPOs welcomed at LSE. Sistema AFK, which generated $1,6 bn, was also the 5th biggest IPO in Europe.
Steven Berger, Partner at PricewaterhouseCoopers Moscow, said about CIS IPO perspectives: “2005 was an incredibly successful year for Russian companies going public. A record $5 bn was raised in 2005, more than in the last 8 years combined. Russian companies consider IPO primarily to increase liquidity to shareholders and also to raise additional capital. There is increasing interest of Russian companies in going public, as over 100 companies have announced plans for IPO. London appears to have been the most popular market with Russian companies in 2005, however, we have seen a number of successful IPOs Russian markets in 2005 as well ”.
Nilesh Lad, Transaction Services Partner at PricewaterhouseCoopers Kiev, commented on the situation in Ukraine: “Given the lack of liquidity in the Ukrainian stock market, many companies are actively pursuing the international IPO opportunities. While Ukrainian activity to date has been relatively low, the potential for this market is enormous, with major domestic companies announcing their intention to list over the next 12-18 months”.
Europe vs USA and Greater China The ‘Greater China’ region comprises Hong Kong, Shanghai, Shenzhen and Taiwan.
The total offering value in Europe in 2005 was boosted by a small number of high-value IPOs, particularly French privatisations, with EDF and Gaz de France jointly contributing 10.5 bn euro or 21% of the total offering value. The increase in European IPO activity was also driven by the continued success of AIM, London’s exchange-regulated smaller companies’ market, which accounted for 52% of total European IPOs in the year. As a result, for the first time since the launch of PricewaterhouseCoopers IPO Watch survey in
2001, Europe raised more new money from IPOs than the US and Greater China combined (51 bn euro in Europe v 27 bn euro in the US and 18 bn euro in Greater China).
After a strong performance in 2004, the US exchanges experienced a slowdown in IPO activity. The number of IPOs dropped from 236 in 2004 to 205 in 2005. Also, the offering value decreased by 10 bn euro from 37 bn euro in 2004 to 27 bn euro in 2005. Closer regulatory scrutiny in the US is reflected in the low number of international IPOs in the United States. 23 overseas companies chose US exchanges as the destination for their IPOs, raising 3 bn euro in 2005. On the other hand, the European exchanges attracted 126 overseas IPOs (including 13 US companies), which raised 9.6 bn euro.
In 2005, the number of IPOs in Greater China also dropped compared with 2004 (94 bn euro v 208 bn euro) due to the suspension of new share issuances in Shanghai from April 2005, but the offering value increased slightly from 14 bn euro to 18 bn euro.
TOP 3 stock exchanges
Although London’s market share by number of IPOs decreased in 2005 to 59% from 70% in 2004, it still leads the European capital markets with 354 IPOs in 2005. The offering value in London increased to 18.6 bn euro in 2005 from 8.3 bn euro in 2004. London was host to the third largest IPO of the year, Partygaming, which raised 1.4 bn euro.
Euronext was the second largest European market in both number and offering value terms. Euronext’s market share by number remained stable at 11% in both 2004 and 2005. The average offering value per IPO excluding introductions was 340m euro, compared to 61m euro on the London exchange, reflecting the small number of high value IPOs on Euronext, including the two largest IPOs of 2005, Electricitй de France and Gaz de France.
The Deutsche Boerse was the third most active exchange in 2005 by volume and in value terms. Its 43 IPOs raised 3.6 bn euro of new money in 2005. This represents a significant increase on the previous year when 10 IPOs generated 1.8 bn euro in offering value. Deutsche Bцrse was host to the sixth largest IPO of 2005, namely that of the media and entertainment company Premiere AG, which raised over 1.0 bn euro.
The top five sectors which experienced the most IPO activity in 2005 were: the mining sector with 54 IPOs; followed by both oil & gas and speciality & other finance sectors with 50 IPOs each; software & computer services with 46 IPOs and 38 pharmaceuticals & biotechnology IPOs.
Future
Looking forward to 2006, there is economic uncertainty particularly around high oil prices and other factors which can impact on the IPO market. However, provided that no negative economic factors emerge, there is no reason why IPO markets should not continue to thrive. With the continued need for capital from emerging markets economies such as Russia, China and India, Europe should continue to be a popular destination for international IPOs.
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Notes to Editor:
1. Ten largest (ranked by money raised) IPOs
Company
name | Money ralsed
€ m | Exchanged
listed on | Sector |
| EDF | 7000.0 | Euronext | Electricity |
| Gaz de France | 3841.9 | Euronext | Olil & Gas |
| PartyGaming PLC | 1356.4 | London | Leisure & Hotels |
| Telenet Group Holding | 1060.0 | Euronext | Media & Entertainment |
| Sistema JSFC | 1040.5 | London | Telecommunication |
| Premiere AG | 1024.8 | Deutsche Bцrse | Media & Entertainment |
| RHM | 984.9 | London | Food Producers & Processors |
| Kazakhmys | 970.9 | London | Metals |
| Raiffeisen International Bank | 968.5 | Wiener Bцrse | Banks |
| EFG International | 893.0 | Swiss Stock Exchange | Banks |
| Total | 18,781 |  | |
2. IPO Watch Europe surveys all new primary market listings on Europe’s principal stock markets and market segments (including exchanges in the EU member states plus Switzerland and Norway) on a quarterly basis. Investment-related companies’ listings, movements between markets on the same exchange and greenshoe offerings are excluded. The IPO Watch Europe – Review of the year 2005 collates data from the quarterly surveys conducted between 1 January and 31 December 2005, capturing new market listings based on their listing date.
3. PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services for public and private clients. More than 130,000 people in 148 countries connect their thinking, experience and solutions to build public trust and enhance value for clients and their stakeholders.
“PricewaterhouseCoopers” refers to the network of member firms PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
4. For additional information please call Natalia Blotskaya, PwC Ukraine Marketing&Communications Manager, at (044) 490 6 777 or e-mail to: natalia.blotskaya@ua.pwc.com.
