Ernst & Young: Global IPO activity expected to pick up

By Rob Starr, Content Manager, Big4.com

The global outlook for IPOs in 2013 is better but low business confidence and sentiment continues to cloud the picture for Australia.

Ernst & Young’s Year End Global IPO Update shows that in the year to the end of November, there were 768 IPOs globally which raised US$118.5b, down 37% and 30% respectively compared to full year 2011.

More than half the 36 capital raisings in Australia in 2012 were small resource companies with average capital raised less than US$10m and a single IPO – Woolworths’ spin-off of retail properties into the Shopping Centres Australasia Property Group – accounted for more than half the total capital raised for the year.

Anne-Maree Keane, Ernst & Young Australia Transactions Partner, says the Australian equity market is in “relatively good shape” and is “on the up” but broader business confidence and sentiment continues to cloud the outlook for any increase in IPO activity.

“However there are more people looking for that IPO window. We have seen more interest from businesses in the past couple of months looking at a possible IPO later in 2013 and there is an appetite out there from investors for good businesses with solid fundamentals. The interest rate environment is also assisting as the debt/equity balance is starting to look right,” says Keane.