IPO Watch Europe 2011

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L’étude « IPO Watch Europe» analyse chaque trimestre les introductions en bourse sur les principaux marchés et segments de marchés en Europe ainsi que la Suisse et la Norvège. Les mouvements entre segments de marché d’une même bourse et les offres de type « greenshoe » (rallonge) sont exclus. Cette étude, qui a été menée entre le 1er janvier et le 31 décembre 2011, analyse les introductions en bourse d'après leur date d'admission à la cote. Toutes les données de marché proviennent des bourses elles-mêmes ; PwC n’a pas procédé à une vérification indépendante de ces données.

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IPO Watch Europe 2011

  1. 1. www.pwc.co.uk www.pwc.com IPO Watch Europe 2011IPO Watch Europe surveysstock market listingsin Europe and providesa comparison with theworld’s major markets
  2. 2. ContentsForeword 4Europe — Review of the year IPOs by quarter 6 Major IPOs 7 Major EU-regulated and exchange-regulated markets 8 Other markets 11 International IPOs 12 Value of equity trading 15 IPOs by sector 16 Developments in regulation and markets 18Global perspective 20 IPO activity in Greater China 21 IPO activity in the US 22 IPO activity in Japan 23 IPO activity in the Gulf Cooperation Council 24 IPO activity in Latin America 25 IPO activity in Singapore 26 IPO activity in Australia 27About IPO Watch Europe 28About the Capital Markets Group in London 29About the IPO Centre 29Capital Markets network 30 IPO Watch Europe 2011  3 
  3. 3. A positive start to 2011 A few large transactions Foreword followed by economic and political uncertainty dominated the European markets A bright beginning to 2011 proved to be The year was dominated by a few large something of a false dawn for the IPO transactions with the top six European market with the year being plagued by deals raising €16bn, 60% of total IPO delays and postponements due to market proceeds across Europe, compared to volatility resulting from the Eurozone 37% (€9.6m) in 2010. crisis. Nevertheless, some major floats took place in Europe, with London, London listings were dominated by Madrid and Warsaw all hosting companies in the natural resources Despite a lacklustre end to high-profile IPOs. sectors, which in total raised €8.2bn and accounted for 58% of transactions on the 2011, a total of 430 IPOs Despite the lacklustre end to the year, a London Stock Exchange. Glencore, the across Europe raised total of 430 IPOs across Europe raised commodities trader’s €6.9bn entrance €26.5bn, a 13% increase in €26.5bn in 2011 a 13% volume increase into the FTSE 100, was the biggest deal and just a 1% rise in money raised in London, bolstering IPO values in the volume and a 1% rise in compared to 2010. However, pressure on Square Mile during 2011. The top three money raised compared pricing partly contributed to average London listings, Glencore, Vallares, the to 2010. deal values dropping by 10% from €86m oil and gas venture, and Justice in 2010 to €77m in 2011. Holdings, an investment company, accounted for more than €9bn of the IPO values were skewed significantly proceeds raised in London. Two of these, towards the first half of the year as Vallares and Justice Holdings, were IPOs markets failed to ignite after the summer of special purpose acquisition companies. as hoped, due to the heightened economic uncertainty in Europe. A total Privatisations of government-owned of €16.3bn was raised in the first half of assets in Spain and Poland in the 2011 across the European markets summer of 2011 raised over €5bn with compared to €10.2bn in the last six the Iberian discount supermarket months of 2011. retailer Dia, which has a strong presence in emerging markets, adding a further More than half of money raised in €2.4bn to the total proceeds raised in Europe, €14.1bn, was generated on the Europe in 2011. London Stock Exchange, despite London hosting only a quarter of the IPOs across Global overview Europe. Warsaw hosted the most transactions – 203 in total, albeit at a low In a year which saw serious threats to the average value. stability of the Eurozone, the Arab Spring and the downgrade of the US credit rating by Standard & Poor’s, strain was put on global capital markets, disrupting the IPO plans of companies across all the major capital markets. This was evident in the market volatility indices in the US, the UK and Hong Kong, which hit two-year highs in August 2011.4  IPO Watch Europe 2011
  4. 4. Despite the turbulent market conditions, companies will have to ensure that thein the US a total of 134 IPOs raised groundwork is completed well in Whilst we expect market€25.6bn compared to 168 floats advance so they can be opportunistic volatility to continue intogenerating €29.1bn in 2010 (which also should an IPO window open. Otherincluded the €11.6bn re-privatisation of lessons learned in 2011 include the need 2012, we expect an IPOGeneral Motors). US IPO markets for selling shareholders to be realistic window to emerge. To beexperienced a surge in activity in the about company valuation and to ensure opportunistic whenfirst half of 2011 with the return of that the business is supported by alarger deals, including HCA Holdings compelling equity story to attract market conditions areand Kinder Morgan. The year finished potential investors. favourable, companiesstrongly with the IPOs of Groupon, Although there have been some need to ensure that theMichael Kors and Zynga boding wellfor 2012. encouraging signs at the start of this groundwork is completed year, exactly when markets will pick up well in advance.Greater China was the leading global again is uncertain and the Olympics mayIPO centre, hosting 420 IPOs and raising be well under way by the time the IPO€57.2bn during 2011. However, this market gets out of the starting blocksrepresented a 42% drop in value and into its stride.compared to 2010.Hong Kong continued to build itsreputation as a ‘go to’ place for luxurybrand IPOs and was given a furtherboost with a number of high profilecompanies coming to market includingPrada, which floated in June 2011 Figure 1: Volume of IPOs Figure 2: Offering value of IPOsraising €1.5bn.Outlook for 2012 800 90,000As 2011 drew to a close, the continued 700uncertainty of the Eurozone significantly 75,000disrupted the European capital markets. 600However, in the first few weeks of 2012, Offering value (€m) 60,000 Volume of IPOswe have seen some optimism return for 500IPO prospects with the London IPO ofRuspetro and a spate of IPOs launching 400 45,000in the US, including the much publicisedFacebook IPO. This reflects some easing 300of the tough market conditions that 30,000plagued the end of 2011 and has been 200further boosted by the rally in stock 15,000market indices around the world in 100early 2012. 771 295 126 380 430 80,449 13,953 7,112 26,286 26,491 0 295 126 380 430 0 295 126 380 430Whilst we expect market volatility to 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011continue into 2012, there will be periodswhen market conditions will befavourable for IPOs. In this climate, IPO Watch Europe 2011  5 
  5. 5. IPOs by quarter European capital markets saw a poor The year ended with a disappointing Q4 2010 that raised €10,115m. London first quarter of 2011 with deal values fourth quarter as volatility continued to dominated activity in Q4 2011 raising plummeting by 71% from €10,115m in destabilise the already fragile markets. €800m, 92% of total European IPO Q4 2010 to €2,960m in Q1 2011. The The last quarter of 2011 saw 78 IPOs value, with the IPO of Polymetal number of IPOs also fell by 26% from raising only €866m, a 40% decrease in (€421m) accounting for 49% of the 129 listings in Q4 2010 to 95 in Q1 2011 transaction volume and an 91% drop in quarter’s IPO proceeds across all the with London hosting the lion’s share of offering values compared to 129 IPOs in European exchanges. deals in the first quarter. Throughout the early 2011 market conditions remained fragile with growing uncertainty as a Figure 3: Volume of IPOs result of political and economic unrest in a number of countries leading to the postponements of a number of large 140 floats such as BILT Paper and Topaz Energy and Marine. 120 The markets continued to endure the 100 fallout in the second quarter from Number of IPOs heightened concerns over Greece, Spain 80 and Portugal. However, despite the increasing turbulence in the capital 60 markets, European exchanges hosted 136 listings raising €13,295m in Q2 2011 40 compared to 89 listings raising €9,014m in Q2 2010. Companies in the Basic 20 Resources, Mining and Oil and Gas 77 89 85 129 95 136 121 78 sectors dominated the European IPO 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 market in Q2 2011 with the IPOs of 2010 2011 Glencore, the commodities trader, and Vallares, the oil and gas venture, raising a total of €8,049m, accounting for 61% of the total quarterly proceeds. Figure 4: Offering value of IPOs IPO activity in Q3 2011 compared 14,000 positively to the same quarter in the prior year with 121 companies raising 12,000 €9,370m versus 85 IPOs in Q3 2010 raising €2,479m. Of the money raised in 10,000 Q3 2011, €7,416m was generated from Offering value (€m) four IPOs: €5,038m came from the July 8,000 privatisations of government-owned assets in Spain and Poland and €2,378m 6,000 from the IPO of Dia, the Iberian discount supermarket retailer. The later part of 4,000 Q3 2011 was significantly affected by increasing economic uncertainties in the 2,000 European markets as was evidenced by the postponement of the Spanish 4,678 9,014 2,479 10,115 2,960 13,295 9,370 866 national lottery IPO in September 2011. 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 20116  IPO Watch Europe 2011
  6. 6. Major IPOsThe total money raised by the top ten Of note is that 2011 featured a number of Following the London float of Vallar inIPOs increased by €5,194m, or 41% from banking IPOs in the top ten for the first 2010, a special purpose acquisition€12,816m in 2010 to €18,010m in 2011. time since 2007 (VTB Bank in London) company set up by Nathanial RothschildThe contribution of the top ten to total and 2008 (Commercial Bank of Qatar in to fund mining acquisitions, two furthermoney raised in Europe rose from 49% London). Two of these IPOs, Bankia and investment companies successfullyin 2010 to 68% in 2011, reaching similar Banca Cívica, were hosted in Spain in Q3 floated in 2011. They were Justicelevels to those achieved in 2009 (72%). 2011 and relate to the privatisation of Holdings, the cash shell set up by Nicolas Spanish government holdings. Berggruen (the backer of hedge fund,The London listing of Glencore, the GLG, and Pearl Insurance) and Martinworlds largest commodities trading The retail sector was boosted by the Franklin; and Vallares, the cash shellcompany, raised 38% of the top ten’s €2,378m raised by Dia, the Iberian founded by former BP CEO, Tonycontribution to value. The Glencore discount supermarket group, which has a Hayward, and Nathaniel Rothschildlisting was the largest IPO in Europe strong presence in emerging markets. targeting oil and gas acquisitions insince Electricité de France raised €7bn emerging markets.on the Euronext exchange in 2005. Ten largest IPOs: 2011 (ranked by money raised) Company Money raised €m Exchange Sector Country of origin Glencore 6,867 London Basic Resources Switzerland Bankia 3,092 BME Banks Spain Dia 2,378 BME Retail Spain Jastrzębska Spółka Węglowa 1,346 Warsaw Mining Poland Vallares 1,182 London Investment Company UK Justice Holdings 1,063 London Investment Company UK Banca Cívica 600 BME Banks Spain OJSC Phosagro 530 London Chemicals Russia Nomos Bank 497 London Banks Russia Aker Drilling 455 Oslo Oil & Gas Norway Total 18,010Ten largest IPOs: 2010 (ranked by money raised)Company Money raised €m Exchange Sector Country of originEnel Green Power 2,264 Italy and Spain Utilities ItalyPZU 1,990 Warsaw Insurance PolandEssar Energy 1,485 London Utilities IndiaGjensidige Forsikring 1,356 Oslo Insurance NorwayAmadeus 1,317 Spain Technology SpainPandora 1,227 OMX Personal & Household Goods DenmarkTauron Polska Energia 1,026 Warsaw Utilities PolandVallar 822 London Investment Company Channel IslandsMail.Ru Group 669 London Media RussiaKabel Deutschland Holding 660 Deutsche Börse Telecommunications GermanyTotal 12,816 IPO Watch Europe 2011  7 
  7. 7. Major EU-regulated and exchange-regulated markets EU-regulated markets were dominated by a few large deals while the number of IPOs on exchange-regulated markets soared EU-regulated London’s market share by offering Oslo Børs, NASDAQ OMX, NYSE value in Europe increased from 40% Euronext and the SIX Swiss Exchange Despite a 9% fall in the volume of in 2010 to 53% in 2011, although its all experienced drops in volume and transactions, EU-regulated markets market share by volume fell from 30% value from 2010 to 2011. These four saw a 5% increase in value raised in to 24%. This was largely due to a rise exchanges raised a combined total of 2011. Conversely exchange-regulated in low value transactions on Warsaw’s €4,876m from 39 transactions in 2010 markets experienced an increased NewConnect market. whereas 27 deals raised a mere €882m volume of transactions (24%) but in 2011. This was a drop of 31% by raised less money (33%). These trends The Spanish Stock Exchange displayed volume and 82% by value. differed to those of 2010, where EU- the largest increase in activity relative and exchange-regulated markets both to 2010, with the value of IPOs more The Deutsche Börse, Borsa Italiana faced overwhelmingly positive uplifts than tripling from €1,562m in 2010 to Main and Wiener Börse saw their in volumes and values from €6,083m in 2011. The top two Spanish combined number of transactions 2009’s figures. IPOs, together worth €5,470m, raised increase by 50% from a low base of 12 90% of the Spanish proceeds in 2011. in 2010 to 18 in 2011, though the EU-regulated markets hosted 118 IPOs These were Dia, the Iberian retailer money raised fell 48% from €4,396m raising €24,695m in 2011. This and Bankia, which was formed as a to €2,305m. accounted for 27% of total IPOs in 2011 and 93% of the total result of the union of seven Spanish Exchange-regulated money raised. financial institutions. It is notable that Bankia raised funds in response Exchange-regulated markets hosted The top two European markets, to new government rules on bank 312 IPOs raising €1,796m in 2011. London’s Main market and BME capital levels following the global This was a 24% rise in volume but a (Spanish Stock Exchange) were the financial crisis. 33% fall in value compared to 2010 only EU-regulated exchanges raising when 250 transactions completed more money in 2011 than in 2010. The Warsaw Stock Exchange ranked raising €2,696m. Exchange-regulated London again led the European capital third by IPO value, with 31 IPOs markets accounted for 72% of total markets in terms of value, with 101 raising €2,067m, although the IPOs and 7% of total offering value in IPOs raising €14,104m, reaffirming its exchange saw a 45% drop in money 2011. place as the leading European market raised year on year, while the number London’s AIM market topped the table and a key international financial of transactions rose by 19%. for money raised with 60 transactions centre. The amount raised in London (only two more than in 2010) raising increased by €3,585m (or 34%) in Warsaw benefited from the €1,346m €516m, 56% less than last year’s total 2011, though activity was buoyed by raised by the privatisation of the of €1,180m. AIM contributed 29% of the €6,867m listing of Glencore in May state-controlled Polish coking coal the money raised in exchange- 2011 contributing 49% of the value company, Jastrzębska Spółka regulated markets in 2011, down from raised in London. Węglowa, which was the fourth largest 44% in 2010. IPO of 2011.8  IPO Watch Europe 2011
  8. 8. The top three AIM IPOs were all oil 2011 and its money raised more than Nimrod Air Two, an investmentand gas exploration companies. tripled from €40m to €133m. The Irish company, raised €154m on LondonTrapoil, the largest AIM IPO of the Stock Exchange hosted no SFM; and Catcher Technology Co andyear raising €69m, focuses on transactions in 2010 and only one in Neo Solar Power, both suppliers ofexploration on the UK Continental 2011, Continental Farmers Group, industrial goods and services, raised aShelf, Bayfield, which raised €61m, worth €17m (a dual listing with combined total of €246m onfocuses on exploration in Trinidad and London AIM). Luxembourg MTF.Tobago and 3Legs Resources, which NYSE Euronext Alternext saw a 10% Luxembourg EuroMTF, London SFM,raised €56m, focuses on exploration in fall in volumes year on year, from 21 to Deutsche Börse Entry Standard, BMEPoland and Germany. 19 transactions, but a 52% rise in value (Spanish Stock Exchange) MAB andOslo Axess, WSE NewConnect and the Borsa Italiana AIM all experienced a from €73m to €111m. €43m of thisIrish Stock Exchange all experienced decline in both the number of IPOs money was raised by the IPO of Tekkagrowth in both the number of they hosted and the amount of money Group, the French healthcare provider.transactions they hosted and the they raised. In 2010, 69 transactions In contrast, NASDAQ OMX First Northamount of money raised. Oslo’s nine raised €1,298m whereas in 2011 these saw a 89% rise in volumes – from 9 toIPOs raised €264m, although 93% figures had dropped by 49% and 41% 17 – but an 82% fall in values from(€245m) related to the IPO of Sevan respectively to 35 transactions raising €22m to €4m.Drilling, a deepwater drilling €768m. Three transactions accountedcompany. NewConnect’s IPO volumes for €400m, or 52%, of the total moneydoubled from 86 in 2010 to 172 in raised across the five exchanges: Doric Major EU-regulated and exchange-regulated markets 2011 2010 Stock exchange Company IPOs Offering value (€m) Company IPOs Offering value (€m) EU-regulated London (Main) 1 39 13,371 52 9,034 1 BME (Spanish Stock Exchange) 4 6,070 2 1,514 WSE (Main) 31 2,067 26 3,770 Deutsche Börse 13 1,445 10 2,297 Oslo Børs 4 551 9 2,362 1 Borsa Italiana (Main) 3 494 2 2,099 Wiener Börse 2 366 – – NASDAQ OMX (Main) 13 288 15 2,007 NYSE Euronext (Euronext) 8 43 11 344 SIX Swiss Exchange 2 – 4 163 EU-regulated sub-total 1 118 24,695 130 23,590 Exchange-regulated London (AIM) 1 60 516 58 1,180 Luxembourg (EuroMTF) 20 451 36 797 Oslo Axess 9 264 7 83 London (SFM) 2 217 4 305 WSE (NewConnect) 2 172 133 86 40 NYSE Euronext (Alternext) 19 111 21 73 Deutsche Börse (Entry Standard) 5 78 13 116 Ireland (ESM) 1 1 17 – – BME (Spanish Stock Exchange) MAB 5 13 10 48 Borsa Italiana (AIM) 3 9 6 32 NASDAQ OMX (First North) 17 4 9 22 Exchange-regulated sub-total 1 312 1,796 250 2,696 Europe total 1, 2 430 26,491 380 26,2861. IPOs by market are shown gross of dual listings. However these are netted off in the Europe total number and offering values. • International Consolidated Airlines Group dual listed on London (Main) and BME (Spanish Exchanges) but raised no money. • Continental Farmers Group dual listed on London (AIM) and Ireland (ESM) raising €17m. • Enel Green Energy dual listed on Borsa Italiana (Main) and BME (Spanish Exchange) in 2010 raising €2,264m.2. Cumulatively the WSE NewConnect raised €148m in 2011 and €51m in 2010. However some of the NewConnect transactions raised an amount that rounded to a lower figure and the total above is the sum of these rounded values. IPO Watch Europe 2011  9 
  9. 9. 10  IPO Watch Europe 2011
  10. 10. Other marketsQuarterly IPO Watch Europe survey Germanytracks the volume and value of IPOs 2011 2010across all the main European exchanges.However certain junior markets are not Offering Offering Stock exchange IPOs value (€m) IPOs value (€m)included within the Quarterly IPO Watch Deutsche BörseEurope survey. This section discusses the EU-regulated markets:nature and activity of those markets. Prime Standard 12 1,445 8 2,297 General Standard 1 – 2 –First Quotation Board Deutsche BörseFirst Quotation Board is the Deutsche exchange-regulated markets:Börse’s junior market and, along with Entry Standard 5 78 13 116Entry Standard, comprises the exchange- First Quotation Board (FQB) 199 35 151 50regulated platforms of Deutsche Börse. It Germany total 217 1,558 174 2,463is primarily aimed at qualified investors.The First Quotation Board was the LondonEuropean junior market with the highest 2011 2010volume of IPOs in 2011. However, the Offering Offeringexchange was the only junior market Stock exchange IPOs value (€m) IPOs value (€m)featured in our survey to see a drop in Main Market 39 13,371 52 9,034money raised from €50m in 2010 to €35m AIM 60 516 58 1,180in 2011. London (SFM) 2 217 4 305Deutsche Börse announced at the beginning PLUS 21 7 20 5of 2012 that First Quotation Board will be London total 122 14,111 134 10,524discontinued in its current form at somepoint in the second half of 2012. NYSE EuronextPLUS 2011 2010 Offering OfferingPLUS is a small and mid-cap stock Stock exchange IPOs value (€m) IPOs value (€m)exchange in London. PLUS operates two Alternext 19 111 21 73primary markets (the PLUS-listed and Euronext 8 43 11 344PLUS-quoted markets) as well as a Marché Libre 14 3 27 1secondary trading market (PLUS-traded). In 2011, the PLUS exchange NYSE Euronext total 41 157 59 418hosted 21 IPOs raising €7m, an increaseof 5% by volume and 40% by value The Marché Librecompared to 2010. The Marché Libre is an exchange- Marché Libre hosted 14 IPOs in 2011, regulated market operated by NYSE raising a total of €3m. IPO volume Euronext. It addresses small and dropped 48%, from 27 IPOs in 2010, medium-sized firms seeking a public though money raised tripled from €1m listing without facing the levels of to €3m. regulation associated with NYSE Euronext senior markets. IPO Watch Europe 2011  11 
  11. 11. International IPOs International IPOs covers the listings of Figure 5: Volume of international IPOs by country of origin companies with substantial operations outside the European countries covered by this survey. IPOs of international companies in Europe showed a sharp decline in 2011 in India 19% the absence of any real “blockbuster” China listings. The money raised by companies 34% USA with operations outside Europe decreased by 48% from €8,714m in 2010 12% Russia to €4,597m in 2011. However, the volume Ukraine of international IPOs remained relatively South Africa stable with 96 transactions in 2011 and 12% Other 6% 100 in 2010. 7% 10% A wave of companies with significant operations in Russia made up the top five international deals, all of which were hosted in London. Together they contributed 49% of the money raised from international IPOs in 2011. PhosAgro, the global phosphate-based Figure 6: Value of international IPOs by country of origin fertilizer producer, was the leading international IPO in 2011, raising €530m on the London Main market in July 2011. The IPO of Nomos Bank, a fast growing 7% 3% Russian bank, raised €497m. Both 4% Russia achieved a place in the top ten European 4% IPOs in 2011. Polymetal International Taiwan PLC, the precious metals producer in 5% Tanzania Russia and gold producer in Kazakhstan, 5% Brazil 59% was the only significant IPO in Q4 2011. India It raised €421m, just missing out on a 6% China place in the top ten European IPOs for Ukraine 2011. 7% UAE Consistent with historical trends, India Other was the prime source of international IPOs measured on volume, mainly through GDR offerings in Luxembourg. However, these listings only accounted for 5% of international offering value. Top five international IPOs Company Money raised €m Exchange Sector Country of origin OJSC PhosAgro 530 London Chemicals Russia Nomos Bank 497 London Banks Russia Polymetal International 421 London Mining Russia Etalon Group Limited 398 London Real Estate Russia Global Ports Investments 371 London Oil & Gas Russia Total 2,21712  IPO Watch Europe 2011
  12. 12. Figure 7: Volume of international IPOs by sector The oil and gas sector generated the highest volume and highest value of international IPOs in 2011 with 20% of volume and 22% of value raised. The mining sector, together with industrial goods and services, was the joint second 16% 20% Oil & Gas largest sectors by volume, each 4% Industrial Goods & Services contributing 18% of international IPOs. 4% Mining The majority of the international oil and Food & Beverage gas and mining sector listings were 5% 18% hosted on either the London Main or AIM Basic Resources 6% markets, consolidating London’s position Technology as a hub for companies operating in these Personal & Household Goods sectors. However, consistent with 9% 18% Utilities previous years, there was a spread of Other international IPOs among the different industry sectors. London remained the primary market for international IPOs in Europe, accounting for 79% of all international funds and 56% of IPO volume. In 2011, 54 international transactions raisedFigure 8: Value of international IPOs by sector €3,658m, a 36% fall from 2010s figure of €5,713m. International IPOs accounted for 26% of money raised in London in 2011, compared with 54% in 2010. 2% 5% 4% Oil & Gas 22% Industrial Goods & Services 7% Real Estate Chemicals 11% Mining 14% Banks 11% Food & Beverage Investment Company 12% 12% Personal & Household Goods Other IPO Watch Europe 2011  13 
  13. 13. Picture here14  IPO Watch Europe 2011
  14. 14. Value of equity trading Figure 11: Value of equity trading 2011 Total trading (2011) 4% €8,755bn 8% London Stock Exchange Group 8% 31% NYSE Euronext Deutsche Börse 13% BME (Spanish Exchanges) SIX Swiss Exchange OMX 20% Other 16% Figure 12: Value of equity trading 2010 4% 8% Total trading (2010) London Stock Exchange Group 8% 29% NYSE Euronext Deutsche Börse €6,654bn 14% BME (Spanish Exchanges) SIX Swiss Exchange OMX Other 16% 21% Source: World Federation of Exchanges Note: London Stock Exchange Group comprises the London Stock Exchange and Borsa Italiana Equity trading saw a recovery in 2011 Although Ireland had one of the lowest with the trading values rising by 32% equity trading values, it experienced from €6,654bn in 2010 to €8,755bn in the largest growth – almost tripling in 2011. Three quarters of the European value from €7,280m in 2010 to €18,980m exchanges saw a rise in the value of their in 2011. equity trading. Three exchanges saw a drop in trading The top five stock exchanges accounted volumes with Athens experiencing a 51% for 88% of all equity traded in Europe in drop in its equity trading, Luxembourg 2011, broadly in line with 2010. falling 44% and the Wiener Börse London maintained its position as the decreasing by 13%. leading market with trading values The relative proportions of the total equity increasing by 37% from €1,949bn in 2010 traded across the larger European to €2,665bn in 2011. exchanges such as the London Stock Trading on NYSE Euronext increased by Exchange Group and NYSE Euronext 28% reaching €1,776bn in 2011 remained broadly consistent with last compared to €1,388bn in 2010. Equity year’s performance. trading on Deutsche Borse also grew by 32% reaching €1,431bn in 2011 from €1,088bn in 2010. IPO Watch Europe 2011  15 
  15. 15. IPOs by sector Natural Resources IPOs, comprising The IPOs of Vallares and Justice The number of listings in the Technology companies operating in the Basic Holdings in London raised €2,245m, sector increased by 29% from 35 IPOs in Resources, Mining and Oil & Gas sectors, 59% of the total proceeds raised by the 2010 to 45 in 2011, although money dominated IPO money raising in Investment Companies sector in 2011. raised dropped significantly from Europe during 2011. Some 39% The Investment Companies sector €1,750m in 2010 to €210m in 2011. of proceeds were represented by Natural reached third place for both IPO value Consistent with 2010, the majority of Resources companies, raising €10,404m and IPO volume in 2011, though total IPOs in this sector were hosted on the compared to €1,591m in 2010. volume was 31% down on 2010’s figure Warsaw Stock Exchange, with 25 IPOs of 48 IPOs. The London Stock Exchange raising €8m, followed by the London The largest IPO of the year, Glencore, led the activity in the sector with 23 out Stock Exchange hosting 7 IPOs, raising accounted for 26% of total proceeds of the 33 Investment Company IPOs in €46m. Technology company IPOs on raised in Europe in 2011 and 99.5% of 2011. The average amount of proceeds average raised €4.7m. the value raised by the Basic Resources raised by Investment Companies in 2011 sector, driving this sector to take the top was €114m. The Oil & Gas sector experienced a spot by value raised. There were a total significant increase in activity and of 11 IPOs of companies in the Basic The Industrial Goods & Services sector moved up to seventh positions in the Resources sector in 2011, six of which retained its top position by IPO volume rankings, with 32 IPOs in 2011 took place on the London Stock for the fifth consecutive year. The sector compared to 15 in 2010. Europe’s tenth Exchange. Average value of proceeds hosted 89 IPOs out of the total 430 largest IPO was the Oil & Gas company, raised by Basic Resources companies in across all the European exchanges in Aker Drilling, on the Oslo Stock 2011 was €627m. 2011, a 41% increase in the number of Exchange, which raised €455m. The deals from 2010. Total money raised in sector raised €1,649m in 2011 compared The IPOs of Bankia and Banca Cívica in this sector of €1,630m remained with €331m in 2010. Spain in July 2011 raised a combined relatively flat in 2011 compared to €3,692m, propelling the Banking sector €1,689m raised in 2010. The majority of The largest shift in the ranking was to second spot with total IPO proceeds floats in this sector (62%) were hosted on witnessed by the Health Care sector, reaching €4,452m compared to only €5m the Warsaw Stock Exchange with an which moved from 17th place in 2010 in 2010. There were a total of eight deals average transaction value of less than to seventh in 2011. The sector hosted in the Banking sector in 2011 compared €1m, cumulatively raising €73m. London 21 IPOs in 2011 compared to only five to only two in 2010. BME, London Stock and Luxembourg exchanges each hosted in 2010, driven by 11 IPOs on Exchange and Warsaw Stock Exchange nine floats raising €394m and €331m, NewConnect and seven IPOs on OMX. each hosted two IPOs with the respectively. The majority of these However, the total value raised by the remaining two deals hosted on companies (72%) had their main sector fell by 67% from €284m in 2010 Luxembourg Stock Exchange and OMX. operations outside Europe. to €94m in 2011. The average deal value in the Banking sector was €556m.16  IPO Watch Europe 2011
  16. 16. IPOs by sector – by value raised Value raised (€m) Value raised (€m)Sector 2011 2010Basic Resources 6,900 31Banks 4,452 5Investment Companies 3,792 4,110Retail 2,513 1,629Mining 1,855 1,229Oil & Gas 1,649 331Industrial Goods & Services 1,630 1,689Real Estate 975 220Chemicals 530 474Personal & Household Goods 463 1,422Food & Beverage 354 682Financial Services 319 885Technology 210 1,750Pharmaceuticals & Biotech 176 736Automobiles & Parts 157 1Media 137 1,117Travel & Leisure 102 458Health Care 94 284Utilities 64 4,925Construction & Materials 61 74Telecommunications 54 722Insurance 4 3,512Total 26,491 26,286IPOs by sector – by volume Company IPOs Company IPOsSector 2011 2010Industrial Goods & Services 89 63Technology 45 35Investment Companies 33 48Oil & Gas 32 15Financial Services 25 22Personal & Household Goods 21 14Health Care 21 5Mining 20 23Pharmaceuticals & Biotech 18 27Travel & Leisure 16 8Food & Beverage 15 19Construction & Materials 13 11Media 12 18Real Estate 12 16Utilities 11 15Basic Resources 11 4Automobiles & Parts 11 1Retail 8 17Banks 8 2Telecommunications 6 10Insurance 2 4Chemicals 1 3Total 430 380 IPO Watch Europe 2011  17 
  17. 17. Developments in regulation and markets Prospectus Directive minimum 25% free float in order to be have been made to criminalise the amendment index included even though the FSA will offences of insider dealing and market admit, by exception, companies to manipulation across the EU. The amended Prospectus Directive premium listing with a lower percentage should take effect on 1 July 2012. It free float. Consideration is also being Both of these proposals now proceed to introduces proportionate disclosure given to using the index rules to impose the next step in the European legislative regimes for rights issues, small and governance standards, though proposals process, engaging with the Member medium-sized companies and companies have yet to be published. States and the European Parliament. with reduced market capitalisation. However, formal adoption is still some During 2011, the European Securities Transparency Directive review time in the future. and Markets Authority made recommendations to the European Initially in response to concerns from Market developments Commission on the detailed measures to smaller listed companies, the European 2011 saw the respective failed mergers be adopted for implementation. These Commission has brought forward of the London and Toronto Stock included the proposal that proposals to reduce the burden of Exchanges and of the Singapore and proportionate, i.e. less, disclosure should ongoing disclosure for all companies Australian Stock Exchanges. In not be available on an IPO or initial traded on regulated markets. Examples addition, the merger plans of NYSE admission to trading on a regulated such as abolishing the requirement for Euronext and Deutsche Börse were market. This regime should reduce the an interim management statement, or blocked by the European Commission at cost of further issues of capital to quarterly report, have been tabled but the beginning of 2012. listed companies. legislation to introduce these changes is still some way off. Developments in London Market Abuse Directive review The conditions for the inclusion of an issuer in the stock market indices is an In 2011 the European Commission area that has been receiving particular brought forward proposals for Market attention in the UK. The FTSE index Abuse Regulation that would extend the committee previously changed the rules scope of the existing framework covering to require non-UK incorporated insider dealing and market companies to have a 50% free float, as manipulation. The regulation would well as acknowledgement of adherence cover any financial instrument traded on to UK market practices, in order to a multilateral trading facility (MTF) or secure inclusion in the UK series of on an organised trading facility to avoid indices. This would thus gain them entry any regulatory arbitrage between to the FTSE 100, for example. FTSE have trading venues. In addition, proposals now introduced rules to require UK incorporated companies to have a18  IPO Watch Europe 2011
  18. 18. IPO Watch Europe 2011  19 
  19. 19. Global perspective 2011 2010 Offering Offering Region IPOs value (€m) IPOs value (€m) Greater China 1, 2 420 57,240 492 98,624 Europe 430 26,491 380 26,286 US 134 25,581 168 29,064 Latin America 21 6,153 22 5,727 Singapore 23 5,350 30 3,533 Japan1 36 1,495 22 7,796 Australia 105 1,195 98 6,441 Gulf Cooperation Council 1 9 567 12 1,531 1. The offering value of IPOs in these markets includes over-allotment or greenshoe amounts. 2. Companies from Greater China are able to list a different class of shares on the different Greater China exchanges. In these cases, the data above includes the value of shares listed on each exchange and the listings as separate IPOs. In 2011 global IPO activity lost much of its momentum. The stormy economic conditions were sufficiently far-reaching to create an impact in all international markets. All major markets experienced flat or declining IPO money raisings. In 2011 global IPO activity lost some of The US dropped to third spot despite a the momentum from 2010. The stormy strong final quarter, with values falling economic conditions were sufficiently by 12% and volumes decreasing by 20% far-reaching to create an impact in all in 2011 compared with 2010, although international markets. Europe was the 2010 benefited from the €11.9bn raised only region to experience growth (13% by General Motors. and 1% respectively) for both volume and value. Japan experienced an 81% decline in money raised from €7,796m in 2010 to Greater China maintained its position as €1,495m in 2011 following the impact of the top region by value, despite a 42% the earthquake in March 2011. fall in the money raised from €98,624m in 2010 to €57,240m in 2011. It hosted In contrast, Singapore saw a 51% 420 IPOs compared with Europe’s 430, increase in money raised from €3,533m thereby demonstrating a much larger in 2010 to €5,350m in 2011 despite a average transaction value of €137m in 23% fall in IPO volumes. comparison to Europe’s €77m.20  IPO Watch Europe 2011
  20. 20. IPO activity in Greater ChinaHong Kong maintained its position as the Kennedy Liu, Partner, PwC Hong Figure 14:largest capital market in Greater China Kong: IPO volume and offering value 1, 2during 2011 in terms of IPO funds "Global companies and luxury brands areraised. However, the total funds raised increasingly looking to expand in the Asia 600 100,000from Hong Kong IPOs in 2011 was Pacific region, especially China. To do so,€25.1bn, 43% less than in 2010. The these companies need additional funds.number of IPOs totalled 90, down 13% 500 And where better to tap the market for 80,000compared to the prior year. capital than Asia. Listing in the region is also a good way for these international 400 Offering value (€m)The Greater China IPO market was Number of IPOs 60,000affected by external factors in 2011. The companies to enhance their brand andvolatility in the global equity markets image in markets where theyre not as well 300dragged indices in Greater China down known. The uniqueness of Hong Kongs 40,000by as much as 20% throughout the year position makes the city an ideal platform 200with a consequential negative impact on for these global companies to meet withthe price/earnings ratios of IPOs. investors from China." 20,000 100Despite the reduction in IPO volumesand funds raised in 2011, the Hong Kong 0 2009 2010 2011 0IPO market is still expected to be vibrant Offering value Number of IPOsdue to sufficient liquidity and thecontinuous growth of China’s economy. 1. The offering value of IPOs in Greater China includes over-allotment or greenshoe amounts.In Mainland China total IPO volumes 2. Companies from Greater China are able to list awere also reduced. However domestic different class of shares on the different Greater China exchanges. In these cases, the data above includessmall and medium sized enterprises the value of shares listed on each exchange and the listings as separate IPOs.remained the main driving force in theIPO market. A total of €11.7bn wasraised through IPOs in Shanghai, adecline of 45% compared to 2010. Whilea total of €20.1bn was raised on theShenzhen Stock Exchange, a reduction Comparison with Greater Chinaof 40% from 2010. 2011 2010 Offering Offering Stock exchange IPOs value (€m) IPOs value (€m) Europe total 430 26,491 380 26,286 Hong Kong 1 90 25,053 104 43,618 Shenzhen 243 20,118 321 33,318 Shanghai 39 11,678 28 21,069 Taiwan 48 391 39 619 Greater China total 420 57,240 492 98,624 1. The number of IPOs on Hong Kong Stock Exchange excludes transfers from GEM to Main Board. IPO Watch Europe 2011  21 
  21. 21. IPO activity in the US While the US IPO markets had strong IPOs were well diversified across Figure 15: momentum in the first half of the year industries with Technology leading the IPO volume and offering value and a resurgence of activity in the fourth way with 21% of total proceeds, followed 350 50,000 quarter, the markets saw an overall closely by Energy (17%), Healthcare and decrease in activity in 2011. However, Business Services (14% each), Financial 300 there are some positive signs regarding Services (13%) and Consumer Products 40,000 equity markets as we head into 2012. (11%). 250 A total of 134 IPOs generated €25,581m Offering value (€m) Henri Leveque, Partner, PwC US: Number of IPOs 30,000 compared to 168 IPOs raising €29,064m “The US IPO market reflects a tale of two 200 in 2010, representing a 20% decrease in halves in 2011. On the back end of a solid volume and a 12% decrease in value recovery towards the end of 2010, the year 150 20,000 when compared to 2010. However, the kicked off with robust IPO activity 2010 proceeds were skewed by the throughout the first half. Although 100 second largest US IPO in history – the activity was slow for the majority of the 10,000 General Motors (GM) float that raised second half, a few noticeable market 50 €11,567m. windows opened in the fourth quarter, 0 2007 0 contributing to the year ending on a 2008 2009 2010 2011 Despite the decline in volume and value stronger note. This renewed confidence in Offering value Number of IPOs of offerings, average deal size increased the US IPO market, combined with the by 10% from €173m in 2010 to €191m in strong pipeline of offerings provides a 2011. The US IPO market witnessed the positive outlook for the IPO markets in return of some larger deals in 2011, with 2012.” a total of three IPOs in excess of €1bn, compared to 2010 which only produced the GM IPO. Investment company sponsors-backed IPOs, which encompass deals backed by private-equity and venture capital firms, continued to lead the market activity Comparison with the US with 87 of the 134 IPOs (65%) raising €19,967m (78%), compared to 128 deals 2011 2010 (76%) raising €13,293m (46%) in 2010. Offering Offering Stock exchange IPOs value (€m) IPOs value (€m) Although completed IPOs declined, Europe total 430 26,491 380 26,286 interest in the IPO market was strong NYSE 68 18,505 87 22,940 with 274 companies filing initial Nasdaq 66 7,076 81 6,124 registration statements in 2011. Of these US total 134 25,581 168 29,064 offerings, 171 remained in the IPO pipeline at the end of 2011, marking the largest IPO pipeline in several years.22  IPO Watch Europe 2011
  22. 22. IPO activity in Japan2011 saw a 60% increase in IPO volume Takahiro Nakazawa, Partner, Figure 16:in Japan, with the number of IPOs PwC Japan: IPO volume and offering value 1increasing from 22 in 2010 to 36. “Markets are facing a lot of uncertaintiesHowever, this compares with around heading into 2012, such as the strength of 40 8,000150 IPOs each year between 2000 and the Japanese Yen, the sovereign debt crisis2007, highlighting that the market is yet in Europe, and elections in the US, Russia, 35 7,000to fully recover. etc. The development and interaction of 30 6,000 these factors will significantly affect theMoney raised by the 36 IPOs in 2011 was Offering value (€m) capital markets landscape in 2012. It is Number of IPOs€1,495m, 81% down on the €7,796m 25 5,000 consequently very difficult to anticipateraised by 22 IPOs in 2010. Therefore, how many IPOs will take place in Japan 20 4,000although the number of IPOs in 2011 this year.was greater than 2010, the average IPO 15 3,000size was much smaller. However, given the circumstances, many Japanese market players expect that the 10 2,000Nearly one third of the 2011 IPOs were number of IPOs will grow and there will bein the Information and Communication 5 1,000 around 50 IPOs in 2012.”Technology (ICT) sector, and this trendis expected to continue into 2012. 0 2009 2010 2011 0 Offering value Number of IPOs 1. The offering value of IPOs in Japan includes over-allotment or greenshoe amounts. Comparison with Japan 2011 2010 Offering Offering Stock exchange IPOs value (€m) IPOs value (€m) Europe total 430 26,491 380 26,286 Tokyo Stock Exchange (Main) 9 1,070 6 7,522 JASDAQ 16 244 10 134 Mothers 11 181 6 140 Japan total 36 1,495 22 7,796 IPO Watch Europe 2011  23 
  23. 23. IPO activity in the Gulf Cooperation Council In 2011, the number and total value Steve Drake, Partner, Figure 17: raised through IPOs in the six nation PwC Middle East: IPO volume and offering value Gulf Corporation Council (GCC) reduced “Regional IPO activity during the year has to nine IPOs with a total value of €567m been difficult with both issuers and 12 1,600 compared to 12 IPOs with a total value of investors exhibiting caution regarding the €1,531m in the previous year, a 25% right time and conditions to return to the 1,400 10 decrease in activity and 63% decrease market. As we are moving into 2012, we in value. 1,200 are seeing improvements in confidence on 8 Offering value (€m) the supply side and so would expect to see Number of IPOs The year witnessed three IPOs in the 1,000 increased activity in certain regional United Arab Emirates, all in the first half markets during 2012. We see a number of 6 800 of 2011 and one IPO in Oman in Q4. issuers beginning to prepare themselves Although the Kingdom of Saudi Arabia 600 for an IPO so that when the time is right, continued to outperform other GCC 4 they are ready to act quickly.” countries in the number and value of 400 IPOs, with five floats during the year, it 2 still underperformed compared to the 200 previous year, with a decrease of 44% in the number of IPOs and a 65% decrease 0 0 2009 2010 2011 in the total value raised. Offering value Number of IPOs The low performance of the equity markets of the GCC throughout the year was driven by the regional political unrest, wider global economic instability and general investor caution resulting in a risk-averse attitude toward the equity markets. Investor lack of appetite for risk Comparison with the Gulf Cooperation Council coupled with issuer reluctance to sell at 2011 2010 perceived lower valuations contributed to Offering Offering a slow and stifled year in the equity Stock exchange IPOs value (€m) IPOs value (€m) markets. Until the situation begins to Europe total 430 26,491 380 26,286 improve we would expect investor equity Saudi Arabia 5 331 9 942 confidence in the region to remain low. UAE 3 190 – – Oman 1 46 1 205 Bahrain – – 1 358 Qatar – – 1 26 GCC total 9 567 12 1,53124  IPO Watch Europe 2011

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