Professional services giant EY expects a record number of companies to list on global stock markets this calendar year, as investor confidence and monetary conditions improve.
Up to 300 companies could list by the end of March, reaching pre-GFC volumes and raising up to $US45 billion on the back of increased activity in 2013, EY predicts.
“We expect the strong momentum in the US markets and continual recovery of the European and Middle East IPO markets to continue into 2014,” EY global vice chair of strategic growth markets Maria Pinelli reported today.
“2014 could be a bumper year for Asian exchanges due to the reopening of mainland Chinese exchanges and stronger levels of activity from Hong Kong, Japan and Southeast Asian markets.”
Australia will see its “busiest period for transactions … in many years” this quarter, EY predicts, with government asset sales, companies’ renewed focus on growth and growing economic confidence driving more M&A and IPO activity.
Australian deal volume – including M&A and IPOs – fell 15% in 2013 to 1,255 and EY expects pent-up demand to continue driving deals after a string of successful listings late in the year.
The ASX reported a total of 110 floats in the 2013 calendar year and 26 in December alone, including Dick Smith Holdings, Veda and Nine Entertainment.
According to EY, the ASX was the fourth best market for the number of IPOs, after NYSE, NASDAQ and the Hong Kong Stock Exchange. But it was the sixth best market in terms of capital raised, reflecting larger deal volumes elsewhere.
From the report:
“As with the wider M&A market, the businesses seeking listings are across a range of sectors,” EY Oceania Transactions Leader Graeme Browning said of the year ahead for Australia.
“We may also see some public sector assets floated later in the year and private equity will continue to be a key source of IPO flow.
“IPO aspirants must be prepared to act early because a large pipeline means it is likely first movers will win on both timing and price.”