Business: London's share of European IPOs rises despite a dismal year for the markets

London continued to be the most successful European market for Initial Public Offerings (IPOs) in 2008 with an increased market share by offering value of 64%, despite suffering a major decline in the volume and value of its IPO activity during the year. Even in a dismal year for IPOs, due to the loss of confidence in the capital markets and the global economic crisis, London also continued to attract the majority of international offerings on European exchanges with 55% of the 81 completed and four of the top five by value, according to PricewaterhouseCoopers IPO Watch Europe review of 2008.

However, despite hosting or co-hosting seven out of the top 10 European IPOs by offering value, the total money raised in London last year from all listings was just €8,884 million, 77% down on the 2007 figure. This was raised from just 99 IPOs, a 69% decline from the 2007 figure. The review shows that both AIM and London’s Main Market suffered from this reduced level of activity.

Denis O’Connor, Partner, Head of Transaction Services, PricewaterhouseCoopers Ireland said:

“The European exchanges saw a proportionately greater decline in the amount of money raised compared with both the US and Greater China, resulting in Europe being outperformed by both these markets for the first time since 2003. The total offering value of IPOs in Europe last year was just €13,957 million, a massive 83% decline from the 2007 level.

“The current unstable market conditions make it extremely difficult to predict with any confidence when the IPO market is likely to show signs of recovery. Our research shows that equity markets historically lead the business cycle by up to six months and most market commentators do not expect share prices to recover until late 2009 at the earliest. IPO volumes are likely to lag behind the initial recovery of equity prices as, while IPO volumes follow the equity markets, the IPO process itself takes on average between four and six months. This suggests a recovery in the IPO market is unlikely before the second half of 2010.”

Other highlights of 2008 included in the review are:

• In 2008 only three of the top 10 largest IPOs raised over €1billion where as in 2007 all of the top 10 raised at least this amount;
• The Warsaw exchange, one of Europe’s youngest markets, ended up in second place after London in both volume and value terms, hosting or co-hosting two of the top 10 offerings;
• The two leading sectors for IPOs by volume were industrial goods and services and investment companies, although both saw a major decline in volume terms from the previous year. London accounted for 82% of the offering value of the 60 IPOs in the industrial goods and services sector. Despite the crisis in the financial services sector, there were 50 investment company IPOs and four of the top 10 by value in Europe fell into this category.

ENDS

Notes to Editor:

About IPO Watch Europe
IPO Watch Europe surveys all new primary market equity IPOs on Europe’s principal stock markets and market segments (including exchanges in Austria, Belgium, Denmark, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the UK) on a quarterly basis. Movements between markets on the same exchange and greenshoe offerings are excluded. All market data is sourced from the stock markets themselves and has not been independently verified by PricewaterhouseCoopers..

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