By Freya Berry
LONDON, March 14 European equity capital markets
leapt into 2014 with their strongest annual start since 2007,
Thomson Reuters data showed on Friday, as a glut of initial
public offerings helped business surge 38 percent on the same
period last year.
European IPO activity has more than tripled year-on-year to
$12 billion, helped by the flotations this week of Denmark's ISS
and Britain's Poundland among others, as
investors rush to cash in on the region's nascent recovery.
Global proceeds from stock market listings have more than
doubled in 2014 against the same period last year, up 113
percent to $37.1 billion.
"Today the IPO route is open to vendors - this was not the
case two years ago," said Gareth McCartney, Head of Equity
Syndicate at UBS.
"The IPO story is one of restocking the pipeline post the
financial crisis, when this route for vendors was effectively
Boosted by investor enthusiasm, private equity funds have
scented a chance to exit from a backlog of companies acquired
before the financial crisis. Pets at Home, which
debuted in London this week, has been owned by no fewer than
three funds in the past ten years.
The company's second owner, Bridgepoint, looked at an IPO in
2009. But the firm remained unlisted until KKR finally
floated it on Wednesday, the same day that Warburg Pincus
realised a return of 4.5 times on Poundland's $1.7 billion
"There's a lot of pent up demand from private equity
sponsors," said Taron Wade, primary credit analyst at Standard
and Poor's. "It has been more difficult for them to exit
investments via the public markets in the last few years."
The IPO market has been quiet since the crisis, but surging
equity markets last year saw companies rush in from the
sidelines. The S&P Index rose 29.6 percent in 2013.
And as well as a rise in the number of issues, the listings
market is also seeing huge influxes of cash. US companies have
raked in 19 percent more in 2014 than the same period last year,
while firms in the Asia Pacific region have seen their haul rise
by 74 percent, the data showed.
And that figure is set to increase further, with smartphone
screenmaker Japan Display gearing up for a $3.08 billion listing
on the Tokyo exchange on March 19, in 2014's biggest flotation
Goldman Sachs leads the bank rankings with a 12.9
percent share of global equity and equity-related transactions,
processing 66 deals so far this year.
Separate data from Thomson Reuters on Thursday showed that
London is a particular IPO hotspot. This year the city's stock
exchange has seen the highest levels of listings by number and
volume since the first quarter of 2007.
Fourteen companies have raised $5.9 billion in 2014, more
than double the amount raised in the same period last year.
Friday alone saw the debut of online fashion store Boohoo
, the latest in a rash of retailers to float in London,
with House of Fraser, B&M and Card Factory all looking to list
Boohoo was trading at 74 pence a share at 1229 GMT, almost
50 percent above its set price, the day after Circassia
raised 200 million pounds in London's biggest biotech
IPO since at least 1995.
However, the euphoria has not been extended to all
companies. Abu Dhabi-based Gulf Marine Services also
floated on Friday, joining the likes of Russia's Lenta in the
trend of foreign companies seeking prestigious and cash-rich
But the firm received a muted reception in conditional
trading, and was last trading down slightly at 134.50 pence at
1300 GMT, below its offering of 135 pence, already at the rock
bottom of its original range.
Lenta has also suffered since its debut in February. The
hypermarket chain was last trading down 16.5 percent as
investors shy from the long shadow caused by the turmoil in
Ukraine, which has already thrown the future of listings such as
the Russian arm of Germany's Metro into doubt.
But for now, investors and companies alike seem happy to
ride the wave.
"There is plenty of liquidity to support vendors'
aspirations," McCartney said. "We are in a sweet spot for IPO