global ipo market introduction. global stock exchanges (in terms of market capitalization in 2012)...
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Global IPO Market
INTRODUCTION
Global Stock Exchanges(in terms of market capitalization in 2012)
Source: World Federation of Exchanges (as at December 2012)
Hong Kong Exchanges and Clearing Limited
London(4th: USD 3,396.5bn )
London(4th: USD 3,396.5bn )
New York(1st: USD 14,085.9bn )
New York(1st: USD 14,085.9bn )
NASDAQ(2nd: USD 4,582.4bn)
NASDAQ(2nd: USD 4,582.4bn)
Shanghai(7th: USD 2,547.2bn )
Shanghai(7th: USD 2,547.2bn )
Singapore(21st: USD 765.1bn )
Singapore(21st: USD 765.1bn )
Tokyo(3rd: USD 3,478.3bn )
Tokyo(3rd: USD 3,478.3bn )
Shenzhen(16th: USD 1,150.2bn )
Shenzhen(16th: USD 1,150.2bn )
Hong Kong(6th: USD2,831.9bn)
Hong Kong(6th: USD2,831.9bn)
Equity Markets 2012
Source: World Federation of Exchanges
Performance indicator Value/unit% difference
(comparing to 2011)
Market capitalisation USD 55 trillion + 15.1%
Number of listings 46,332 - 0.8%
Value of share trading USD 49 trillion - 22.5%
Number of Electronic Order Book (EOB) trades
9780 million - 14.3%
Average Value of Trades
Source: World Federation of Exchanges
Global Funds Raised in 2012
Source: Hong Kong Exchanges and Clearing Limited
(US$ million) (US$ million)
Trends in the Global IPO Market
Global IPO market is expected to pick up in 2013, due to:
• Strengthening US economy
• Anticipated economic recovery in Europe and Asia in the second half of 2013
• Reduced stock market volatility
• Assertive actions from central banks
• Brighter earning outlook
Rising investors’ confidence
• Four in every five institutional investors interviewed by Ernst & Yong in November and December 2012 invested in pre-IPO or IPO stocks in the past 12 months (In contrast, only one in five during the past 2 or 3 years)
Source: Ernst & Young, “Right team, right story, right price”
Inside Investor Relations
Trends in the Global IPO Market
Source: Ernst & Young, “Right team, right story, right price”
Top 5 preferred investment destinations
1. United States
2. Mainland China and Hong Kong
3. Brazil
4. Other Asia-Pacific countries
5. United Kingdom
Top 5 preferred investment sectors
% of investors*
Financial services 51%
Consumer retail 35%
Consumer products 27%
Oil and gas 27%
Technology 21%* Featured most often in investors’ top three in the survey conducted by Ernst & Young
Benefits of an IPO
Benefits a successful IPO can bring to a company include:
Source of long-term capital
Creation of liquidity
Raised company profile and positive public image
Attraction of foreign partnerships
Enhanced employee morale and loyalty
Improved efficiency of the business
A potential exit strategy for the current owners
Factors for a successful IPO
Factors affecting IPO success include:
Attractive pricing
Compelling equity story
Confidence in management
Right timing
Readiness to provide transparency and good corporate governance
Size of transaction
Reputation of the banking syndicate
Listing venue selection
Source: Ernst & Young, “Right team, right story, right price”
Procedures to IPO
To go public, companies are required to fulfill certain listing requirements set by the stock exchange of the jurisdiction in which the company wishes to be listed
To know more about listing procedure and requirements in various jurisdictions, please refer to the IPO guides prepared by Legalink