China Currently Dominates Global Market for Initial Public Offerings

After two years of stagnation, an increase of initial public offerings by firms can currently be noticed. In the time between January and the beginning of March 2010, 200 firms dared to go public. In comparison: international trade centres reported 864 initial public offerings throughout 2009. Especially exchanges in China and other Asian countries like Taiwan, India, Hong Kong, Singapore or Korea gain momentum again. In Europe on the other hand, the business of initial public offerings is still not doing well. These are the findings of an analysis conducted by the Centre for European Economic Research (ZEW) in Mannheim. The analysis is based on the Zephyr database by Bureau van Dijk (BvD) containing detailed information on mergers and acquisitions, initial public offerings and private equity transactions worldwide.

Almost one third of firms going public for the first time in 2010 are Chinese firms which were listed at stock exchanges in Shenzen and Shanghai. From January to the beginning of March 2010, these first issues make up about 60 percent of the financial volume of all 200 initial public offerings. The consequences of the financial crisis are still damping the enthusiasm for initial public offerings. However, there is hope that the situation is improving. The number of initial public offerings at European trade centres increased from 44 in the third quarter of 2009 to 61 in the forth quarter. In the same time, the volume of the capital raised increased from 1.8 million euro to 5 million euro. "Most firms in Europe are currently issuing their shares for good prices when going public. This is to strengthen first issues and accelerate initial public offerings in 2010", Dr. Tereza Tykvova, who conducted the analysis on the market for initial public offerings at ZEW, says optimistically.

For further information please contact

Prof. Dr. Tereza Tykvova, E-mail: tykvova@zew.de