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BDO: SLOW GROWTH IN U.S. IPO ACTIVITY IN 2013

By Rob Starr, Content Manager, Big4.com

According to a new study by BDO USA, LLP, one of the nation’s leading accounting and consulting organizations, capital markets executives at leading investment banks are projecting measured growth in initial public offerings (IPOs) on U.S. exchanges in 2013. Exactly half predict an increase in U.S.IPO actitivty in the coming year, although only 8 percent describe the increase as substantial, while almost one-third (31%) forecast activity as flat compared with 2012. Just 18 percent expect a decrease in offerings on domestic exchanges. Overall, bankers predict a 6 percent increase in the number of U.S. IPOs in 2013. They anticipate these offerings will average $250 million, which projects to $34 billion in total IPO proceeds on U.S. exchanges.

When asked to identify the greatest threat to a healthy U.S. IPO market in 2013, more than a third (37%) of capital markets executives cite the threat of tax increases and government spending cuts and a similar proportion (34%) highlight global political and financial instability. High unemployment (11%), constrained bank lending (10%) and competition from foreign exchanges (4%) are identified as threats by small minorities of the participants.

The U.S. led all countries in IPO proceeds in 2012, generating more than 40 percent of global proceeds. Even without the Facebook IPO, U.S. exchanges would have led all other countries comfortably. When asked the chief factor driving this trend, the capital markets community identified an anticipated improvement in the U.S. economy (33%), the European debt crisis (33%) and slowing growth in China (23%).

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