Morgan Stanley tops H1 global IPO league table

NEW YORK/HONG KONG (Reuters) - A few large deals helped propel Morgan Stanley (MS.N) to the top spot among underwriters for initial public offerings in the first half of 2010.

The Wall Street bank, which rose from its No. 3 spot last year at this time, underwrote 36 deals with estimated proceeds of $5.9 billion in the first six months, more than eight times what it hauled in from the deals a year earlier, according to Thomson Reuters data at the close of U.S. markets on Tuesday.

Much of the IPO activity in the first half came from Asia, which bankers say is still a good bet for growth despite wobbly markets, and which accounted for six of the ten largest deals.

Japan's $11.16 billion Dai-ichi Life Insurance Co (8750.T) and South Korea's $4.41 billion Samsung Life Insurance Co Ltd (032830.KS) were the largest IPOs.

Fears that Europe's debt crisis could spread have increased market volatility and weighed on new issues, scaring some investors away from smaller, less liquid flotations. Many IPOs were pulled during the quarter due to these fears. Large offerings, however, were able to plod along.

"I think what you will find is that these very large companies do have reasonable comps that they can be measured against, and therefore the confidence that the deals will work is higher," said Deutsche Bank (DBKGn.DE) co-head of global equity capital markets Mark Hantho.

While IPO league table status does not track how the stocks perform in the aftermarket, they give bragging rights to the banks and bankers involved. The table does also indicate what banks are doing good business, as IPOs in most regions pay underwriters a hefty fee for their work.

China, whose stocks .SSEC are among the worst performers globally so far in 2010, took three of the top 10 global spots.

That excludes the July IPO of the Agricultural Bank of China, which aims to raise up to $24.5 billion including overallotments, making it the largest IPO ever if it hits that target.

Among the first half Chinese deals were mid-sized brokerage Huatai Securities (601688.SS), fetching $2.3 billion. And China First Heavy Industries (601106.SS), the mainland's biggest heavy equipment maker, raising $1.7 billion.

Morgan Stanley's rise came from its reach across geographies.

The bank had a joint-bookrunning role on the second largest IPO of the year, South Korea's $4.41 billion Samsung Life.

It also worked on IPOs of Poland's top insurance group PZU PZU.WA, Spain's travel reservations firm Amadeus IT Holding SA (AMA.MC) and Brazilian shipbuilding and oil services company OSX Brasil SA (OSXB3.SA).

"We are in a slow recovery. The question is how slow or fast is it? The market got ahead of itself because the recovery was slower than many expected it to be. The European contagion remains a concern," said Frank Maturo, co-head of equity capital markets for the Americas at Bank of America (BAC.N) Merrill Lynch.

Deutsche Bank's Hantho agreed. "I think we are going to be pretty much in the same state of affairs as we are now (in the second half). These macro concerns aren't going to recede quickly," he said.

JPMorgan (JPM.N), the former No. 1, was in second place with 40 deals totaling $5.65 billion. Goldman Sachs (GS.N) slipped one spot to third place, on 31 deals totaling $5.1 billion.

Proceeds from new issues in the first half of 2010 have increased more than sevenfold from a year earlier, but are still significantly less than pre-crisis, 2007 levels -- and the value of withdrawn deals in the second quarter was the second-highest in the last three years.

BIG DEALS

Bankers say amid the uncertainty investors may find big deals more attractive.

One of these is China's AgBank, while another is AIG's Asian insurer, AIA, which banking sources in the region believe will revive its more than $10 billion IPO plan from earlier this year.

In the U.S., government-owned General Motors GM.UL is moving forward with an initial public offering that could raise up to $20 billion, according to sources familiar with the deal.

The U.S. Treasury, which owns a majority stake in the automaker, has said the offering could happen as soon as the fourth quarter.

"The opportunity to buy large cap companies opens up large pools of capital that you don't usually associate with the U.S. IPO market. There are funds that can only invest in larger capital companies. Those pools of capital are much larger than those dedicated to small and midcap companies," said Credit Suisse (CSGN.VX) head of equity capital markets for the Americas Jeff Bunzel.

Also in the U.S. pipeline are Dutch company NXP Semiconductors, hospital operator HCA Inc and U.S. retailer Toys R Us and Nielsen Holdings. (Editing by Michael Flaherty and Valerie Lee)