It's reassuring to be reading this in the Business Times. I really hope I made the right choice.
http://www.businesstimes.com.sg/sub/news/story/0,4574,283651,00.html?
Ernst & Young report says Brazil, Russia, India, China will pick up slack
By MICHELLE QUAH
(SINGAPORE) Despite market volatility and the credit crunch caused by the US sub-prime crisis last year, global initial public offering (IPO) markets continued to see a healthy flow of activity, fuelled mainly by emerging markets.
Ernst & Young's (EY) fifth annual Global IPO Trends report said that global IPO activity soared to an all-time high of US$284 billion raised in 1,979 deals. And the BRIC countries - Brazil, Russia, India and China - were responsible for over 40 per cent of the proceeds raised.
Going forward, investment bankers and stock exchange executives interviewed by EY predict a healthy pipeline of global IPOs in the year ahead, especially from emerging markets.
This is despite a drastic slowdown in almost all global IPO markets in the first quarter of this year. There were 236 IPOs in the first quarter, generating US$40.9 billion - a 38 per cent drop in volume and a 15 per cent decline in capital raised, from the first quarter of 2007.
EY's report blamed the market turmoil triggered by the credit crunch, which led to a sharp deceleration in most IPO markets around the world. 'Faced with more scrutinising investors and stringent valuations, record numbers of businesses withdrew or postponed their IPO plans,' it said.
Notably, however, eight out of the top 10 IPOs last year were companies from the emerging markets - which were bolstered by robust economic growth at a time when developed markets had to endure a slowdown.
Overall, Greater China raised the most capital and launched the most IPOs, drawing in US$66 billion in 259 deals. The US took second place with 172 IPOs generating US$34.2 billion. The third spot was taken by a second emerging market - Brazil - whose IPO markets produced US$27.3 billion in 64 IPOs.
Investment bankers and stock exchange executives noted that soaring global liquidity and flourishing local economies have kindled emerging markets growth.
'It's a combination of the economic, fiscal and currency strength within these local markets, combined with massive global liquidity,' said Lisa Carnoy, managing director and co-head of equity capital markets at Merrill Lynch in New York.
Noreen Culhane, executive vice-president of the global corporate client group at NYSE Euronext, said: 'As these emerging economies develop so rapidly, there is both a need and an opportunity for new entrepreneurial businesses. These businesses need capital to fund organic growth and to gain a currency for acquisitions.'
And global investors with an appetite for risk have been shifting assets to fast-growing emerging markets where higher returns can be achieved. 'It's a little easier to achieve the alpha or high growth that investors seek in the emerging markets, given their generally greater underlying economic strength,' said Jonathan Grussing, managing director and head of equity corporate finance at Credit Suisse in London.
......
Post Date: 16 Jun 08
No comments:
Post a Comment