The first quarter of 2014 is expected to see global IPO activity continue its upward trend, following a slight increase in the closing quarter of 2013, according to London-based professional services firm Ernst & Young (EY).
In the third quarter of this year there were 864 IPOs, which raised a total of USD163bn, EY said in a press release. 2013 put an end to two years of declining IPO activity, and the momentum is likely to carry on into next year, spurred by increased investor confidence and better market fundamentals.
Hoffman Cheong, EY's Assurance Leader, China North, said that an influx of IPOs is expected in mainland China in 2014 and beyond as the stock exchanges re-open, with more than 50 companies being green-lit for listing as early as January 2014. Over 700 companies are said to be in the queue for listing approval as the mainland's stock exchanges have been suspended by the China Securities Regulatory Commission since October 2012 due to a clampdown on fraud and irregularities.
Hong Kong is also set for increased IPO activity next year, after experiencing robust growth this year in the number of deals and total funds raised. According to Mr Cheong, IPOs in Hong Kong raised an estimated HKD162bn this year, an 80 percent increase from 2012, with the number of deals surging 60 percent to 96. The growth in Hong Kong ensured that Greater China's IPO activity reached a high level in 2013, despite the suspension of listings in the mainland.
"We expect 2014 to be a record year globally and in the region, with economic fundamentals and strong global liquidity fuelling new listings," Mr Cheong said. "We expect an influx of mainland China IPOs in 2014 and beyond...In Hong Kong, we expect to see more IPO activities in 2014, building on strong momentum in 2013 and a number of significant spin-offs of local Hong Kong companies to improve shareholders' value. Sectors which will lead the way include the financial, technology, real estate and healthcare sectors."