* Goldman Sachs top-ranked bank for global ECM
* Global equity fundraising volumes up 24 pct on 2012
* US stock market listings have strongest year since 2000
* Asia ECM sees fall in volumes for third year straight
By Kylie MacLellan, Olivia Oran and Elzio Barreto
LONDON/NEW YORK/HONG KONG, Dec 20 This year has
been the biggest for equity fundraising globally since 2010,
thanks to improving confidence among companies on the back of
the strong investor demand for stocks, according to Thomson
Reuters data published on Friday.
A total of $774 billion has been raised worldwide from
equity capital market (ECM) offerings as of Dec. 18, including
flotations, issues of bonds which are convertible into stock,
and secondary share offers by already-listed companies, a rise
of 24 percent on 2012.
Companies globally raised $159.7 billion from initial public
offerings (IPOs), a 37 percent increase on 2012 and bankers
expect 2014 to carry on where 2013 left off, with many companies
bringing forward plans to go public as they look to take
advantage of the strong market conditions and low levels of
stock market volatility.
"It's the perfect storm for the IPO product," said Evan
Damast, global head of equity syndicate at Morgan Stanley,
saying increasing confidence in global growth and company
earnings as well as investors seeking to boost the proportion of
equities in their portfolios were supporting the market.
"These factors, in addition to positive deal performance,
are encouraging investors to spend more time analysing and
investing in new issue opportunities."
At the same time private equity firms , encouraged by
soaring stock markets to seek exits for their investments proved
a big driver of IPOs in both the United States and Europe. In
London, Blackstone Group and CVC floated amusement parks
operator Merlin Entertainments while Blackstone also
listed hotel operator Hilton Worldwide Holdings in New
Large floats such as Hilton and Plains GP Holdings
helped lift the volume of U.S. IPOs by 22 percent to $49.3
billion, making it the strongest year by proceeds since 2000.
Technology companies like Twitter were also among those
who completed high-profile public offerings in 2013.
According to the data Goldman Sachs was the
top-ranked bank this year, having worked on more than $90
billion worth of deals, almost $26 billion ahead of second place
"The great thing about the IPO market in 2013 was that it
was reasonably broad-based in terms of investor interest in
different sectors, company business models, stage-of-company
development and so forth," said Matthew Sperling, head of equity
advisory for North America at Rothschild.
And bankers expect companies to push ahead through a
normally quieter January to make the most of strong market
"There's a tremendous amount of pitching activity going on
so there will be some things that come in the first quarter,"
said Joseph Castle, Barclays' global head of equity syndicate.
Large U.S. deals next year are expected to come from a
variety of sectors including industrial and financial
institutions, including Chrysler Group LLC, Banco Santander SA's
U.S. consumer lender and General Motors' former financial
services affiliate Ally Financial.
In the technology sector, high profile floats could include
Chinese Internet company Alibaba and payments company Square.
EUROPE TURNS A CORNER
In Europe, where the volume of new stock market listings
more than doubled this year to $34.9 billion, bankers said the
return of U.S.-based investors was a big supporter of deals.
"The general view on the part of investors is that Europe
has turned a corner and is perceived as undervalued ... there
are opportunities here," said Craig Coben, head of Europe,
Middle East and Africa ECM at Bank of America Merrill Lynch.
New money flowing into equity funds have been key, said
Coben, as without them investors don't buy IPOs, or demand deep
discounts as they have to sell an existing holding to buy the
Privatisations, including Polish power company Energa
and British postal service Royal Mail, were a
major source of activity, with governments expected to continue
to take advantage of strong markets to privatise their holdings,
particularly in banks bailed out during the financial crisis.
Britain began selling its stake in Lloyds Bank in
September and is likely to offload more shares in early 2014.
"If markets continue on their current path we may see more
and more privatisations, including the unwinding of government
positions in some of their listed holdings," said Edward Sankey,
global co-head of equity syndicate and co-head of EMEA ECM at
European deals have been dominated by UK firms, which made
up nearly a quarter of ECM proceeds, and over a third of IPOs.
While a string of UK retail and consumer companies,
including Poundland and Pets at Home, are set to go public next
year on the back of improving economic growth, advisors expect a
broader range of activity in Europe in 2014.
Investors are looking at southern Europe again, bankers
said, with several Spanish IPOs in the works including
industrial testing firm Applus+.
CHINA IPOS TO RESUME AFTER FREEZE
In contrast to other regions, equity issuance in Asia
Pacific ex-Japan shrank for a third straight year in 2013, down
1.4 percent to $168.7 billion.
However, IPO proceeds rose 7.4 percent to $41.5 billion as a
surge in deals in Australia, New Zealand and Hong Kong helped
offset weaker markets in Malaysia and South Korea and a freeze
on new listings in mainland China.
Bankers and analysts predict a bumper 2014, with large deals
in Hong Kong putting it centre stage for IPOs again. Among those
expected are a $6 billion deal from Chinese meat processor
Shuanghui International Holdings and a multi-billion dollar
float from health and beauty retailer A.S. Watson.
The resumption of IPOs in Shanghai and Shenzhen next month
should also provide a much needed boost to deal volumes in the
region, after the absence of new issues for more than a year in
"When they re-open, there will be a boom," said Ringo Choi,
Asia Pacific IPO leader at consultancy firm EY in Hong
Next year should also see a surge in IPOs of Chinese firms
in the United States, benefitting from the strong performance of
listings in 2013 including Autohome Inc and 500.com
. Bankers and analysts estimate the number of floats
could exceed 20, from eight in 2013 and just three in 2012.
"The overall trend is an improving one," said a report by EY
on the global outlook for IPOs. "The market window looks its
best in several quarters for the start of 2014."
(Editing by Greg Mahlich)