Another poor quarter for European IPOs

Europe’s initial public offering (IPO) markets have endured another poor quarter with just 28 new listings in the three months up to June 30, although the EUR 456 mln raised was a huge improvement over the EUR 9 mln recorded in the first quarter, according to the latest PricewaterhouseCoopers IPO Watch Europe survey. IPO activity continued to suffer from the global loss of confidence in the capital markets and the fact that there has been pressure on investors to put their money into listed companies looking to strengthen their balance sheets through secondary offerings.
Although volumes and values in the April-June period were well up on the first quarter, they still lagged way behind the second quarter of 2008 when there were 133 listings raising EUR 9,171 mln. The four largest IPOs of the quarter accounted for 88% of the total money raised.
The largest IPO this quarter was Max Property Group, hosted by London’s AIM market and raising EUR 226 mln. In second place was Lubelski Wegiel Bogdanka, a Polish coal mining company which listed on the Main Market of the Warsaw Stock Exchange (WSE) raising EUR 116 mln. The third largest IPO was Altus Resource Capital, a Guernsey-domiciled investment company which listed on London’s SFM market raising EUR 30 mln.
“One of the main reasons is the huge level of secondary fund raising activity we have seen in recent months,” explained Tom Troubridge, head of the Capital Markets Group, PricewaterhouseCoopers LLP. “In the first six months of 2009 more than EUR 50 bln was raised in London alone. By way of comparison, in 2007, a good year for listings, the funds raised by all IPOs in London was EUR 39 bln.
“There are some early signs of companies thinking about preparing for listing. Given the fact that it typically takes six months to prepare for an IPO, we are sticking to our forecast that the IPO markets will not return until the second quarter of 2010,” added Troubridge.
London regained its lead in terms of IPO value, raising EUR 258 mln from three IPOs, two of which were on its AIM market and one on the SFM market. This compares with EUR 6,298 mln raised from 46 IPOs in the same quarter of 2008. There were no IPOs on London’s Main Market this quarter.
The Warsaw Stock Exchange was again the largest market by volume with seven IPOs raising EUR 126 mln. NASDAQ OMX hosted two IPOs this quarter, one on its Main Market which raised EUR 28 mln and one on its First North market which did not raise any funds.
Luxembourg hosted four IPOs raising EUR 22 mln compared to the six that raised 49 mln in Q2 2008. The four were all Indian companies offering Global Depositary Receipts (GDRs).
Borsa Italiana hosted two IPOs last quarter raising EUR 16 mln, both of them on the AIM Italia market, which opened in December 2008 and is closely modelled on London’s AIM. Deutsche Börse hosted three IPOs.
NYSE Euronext was the second largest exchange in terms of volume with six IPOs in the second quarter raising just 1 mln euros. In the second quarter of 2008 it saw 15 IPOs raising EUR 1,615 mln. The SIX Swiss Exchange hosted one IPO which did not raise any funds. The Oslo exchanges, Børs and Axess, BME (the Spanish exchanges), ISE, Wiener Börse and Athens Stock Exchange reported no IPO activity this quarter.