Recent volatility in the global equity market has put pressure on IPOs, forcing many deals to price below their ranges, sell less shares, or postpone/withdraw their plans to go public altogether.
Wind turbine maker Xinjiang Goldwind (2208.HK) withdrew its $1 billion Hong Kong IPO early in the week, citing poor market conditions and excessive volatility. HK's World Wide Touch (1282.HK), which develops touch-screen technology in China, also pulled a smaller $170 million IPO this week for similar reasons.
Despite market turbulence, however, there have been successful deals, showing that the appetite for new equity is present as long as investors believe in the business and the price is right. An example is the $340 million offering of the U.S.'s largest options exchange, CBOE Holdings (CBOE), whose business thrives in times of market volatility. CBOE priced its IPO on Monday at $29, the top of the range, and the company's shares have traded up 8% in the aftermarket.
Agricultural Bank (1288.HK), (601288.CH), a state owned commercial lender in China, also disclosed terms for the world's largest ever IPO - a dual offering of H-shares in Hong Kong and A-shares in China which may raise up to $23 billion. The road show kicked off today, June 18th, and the deal is expected to price early in July.
Other notable deals on the calendar include Poland's second largest power utility, TAURON Polska Energia (1046238Z.PW), looking to raise about $1.4 billion and the second largest construction company in Australia, Valemus (VLM.AU), which is being spun off by Bilfinger Berger and looking to generate about $1 billion in proceeds, both set to price next week; as well as U.S.-based electric vehicle maker Tesla Motors (TSLA), planning a $167 million IPO for the last week in June.
In the U.S., the IPO pipeline continues to swell with 64 companies filing to go public in the 2Q, including household names like Zipcar (ZIP), Toys "R" Us (TOYS) and Nielsen Holdings (NH), which should generate investor interest in the IPO Market. Rumored global offerings include Italy's Banca Fideuram (BFD.RC), the asset management unit of Italian Bank Intesa Sanpaulo, a UK offering of online grocery store Ocado (9851.RC), and an offering in Brussels by Belgian diaper and wet wipes manufacturer Ontex (ONTX.RC).
There have been 192 IPOs globally in the first six months of 2010, far exceeding the 121 and 177 deals that were priced in the full years of 2008 and 2009, respectively. Global IPO proceeds stand at $78 billion raised to date, compared to $85 billion and $106 billion raised in the full years 2008 and 2009.
A busy calendar, a robust pipeline and the recently positive performance of the FTSE Renaissance IPO Composite Index (+1% YTD vs. -0.6% for the S&P 500 and -4.7% for the MSCI World Index), suggest a strong second half of the year for IPOs and a transition to a more active and stable IPO market.
Note: Renaissance Capital's Global IPO Data Center tracks all IPOs with proceeds over US$100 million, with the exception of SPACs and closed-end funds.
