Europe leads the way as global market listings leap
LONDON, March 31
LONDON, March 31 (Reuters) - Global initial public offerings (IPOs) almost doubled in value in the first quarter of 2014, Thomson Reuters data showed on Monday, with Europe leading the way thanks to a nascent economic recovery that lifted investors' confidence and stock markets.
The value of all global IPOs hit $44.3 billion in the first three months of this year, the best first quarter since 2011, and the value of European IPOs soared 191 percent to hit $15.2 billion - the highest since 2000.
"There have been some fantastic deals," said Martin Thorneycroft, head of syndicate at Morgan Stanley. "Coming into this year the pipeline was busy and it's continued to build as investor demand remains robust."
The pan-European FTSEuroFirst 300 Index rose 16 percent last year and has gained 1.2 percent so far in 2014, an attractive environment for the many firms that have waited out the recent recession to list. Senior bankers said the IPO activity was well spread across Europe, including the regions most affected by the financial crisis.
"On a pan-European basis we are seeing flows into southern Europe, starting from Spain but also Portugal, Italy and Greece. It's across sectors," said Klaus Hessberger, co-head of EMEA equity capital markets (ECM) at JP Morgan.
Spain in particular has seen a rise in confidence.
The flotations of real estate investment trusts Grupo Lar and Hispania demonstrated a turnaround in sentiment for a sector that lay at the heart of the country's debt crisis - Hispania attracted investment from fund superstars George Soros and John Paulson.
The IPO of travel company eDreams Odigeo in April will be Spain's first corporate listing since Bankia in 2011.
Market watchers say momentum is feeding morale.
"When the equity markets get working people start trusting each other," said Kate Ball-Dodd, a partner at law firm Mayer Brown who advises on M&A and IPOs. "There is an understanding that it's OK to exit."
Goldman Sachs led the global ECM rankings by value, with 82 deals totalling $18.6 billion, followed by Morgan Stanley with 92 deals totalling $14.3 billion.
CHINA, USA MORE CAUTIOUS
IPO activity also jumped in Asia - the value of deals there more than tripled to $13.1 billion in the first quarter of 2014 - but concerns about mainland China's slower economic growth kept a lid on activity and prompted some disappointing debuts.
Two companies delayed their Hong Kong IPOs this month, while Chinese commercial lender Harbin Bank Co Ltd is to price near the bottom of its marketing range.
The outlook for Japan has also dimmed, with investors shunning Tokyo stocks as attempts to reinvigorate the economy lose momentum. The Nikkei is down 9.8 percent this year.
The $3.2 billion float of Japan Display - the biggest global listing of the year so far - flopped, casting a shadow over April's forthcoming $1.8 billion debut by Seibu Holdings.
Investors in the United States, where both the economy and consumer sentiment cooled at the beginning at the year, have also proceeded with more caution.
U.S. proceeds from IPOs rose by 11 percent against the first quarter of 2013, but the country's share of the global IPO market shrank to 22 percent from 31 percent last year.
Last week Candy Crush maker King was the latest tech company to launch a listing. But the games developer made a less than majestic entry onto the New York Stock Exchange, losing as much as 15 percent in its first day of trading.
(Editing by Sophie Walker)