IPO Watch Europe 2011

Transcription

1 IPO Watch Europe 211 IPO Watch Europe surveys stock market listings in Europe and provides a comparison with the world s major markets

2

3 Contents Foreword 4 Europe Review of the year by quarter 6 Major 7 Major EU-regulated and exchange-regulated markets 8 Other markets 11 International 12 Value of equity trading 15 by sector 16 Developments in regulation and markets 18 Global perspective 2 IPO activity in Greater China 21 IPO activity in the US 22 IPO activity in Japan 23 IPO activity in the Gulf Cooperation Council 24 IPO activity in Latin America 25 IPO activity in Singapore 26 IPO activity in Australia 27 About IPO Watch Europe 28 About the Capital Markets Group in London 29 About the IPO Centre 29 Capital Markets network 3 IPO Watch Europe 211 3

4 Foreword Despite a lacklustre end to 211, a total of 43 across Europe raised 26.5bn, a 13% increase in volume and a 1% rise in money raised compared to 21. A positive start to 211 followed by economic and political uncertainty A bright beginning to 211 proved to be something of a false dawn for the IPO market with the year being plagued by delays and postponements due to market volatility resulting from the Eurozone crisis. Nevertheless, some major floats took place in Europe, with London, Madrid and Warsaw all hosting high-profile. Despite the lacklustre end to the year, a total of 43 across Europe raised 26.5bn in 211 a 13% volume increase and just a 1% rise in money raised compared to 21. However, pressure on pricing partly contributed to average deal values dropping by 1% from 86m in 21 to 77m in 211. IPO values were skewed significantly towards the first half of the year as markets failed to ignite after the summer as hoped, due to the heightened economic uncertainty in Europe. A total of 16.3bn was raised in the first half of 211 across the European markets compared to 1.2bn in the last six months of 211. More than half of money raised in Europe, 14.1bn, was generated on the London Stock Exchange, despite London hosting only a quarter of the across Europe. Warsaw hosted the most transactions 23 in total, albeit at a low average value. A few large transactions dominated the European markets The year was dominated by a few large transactions with the top six European deals raising 16bn, 6% of total IPO proceeds across Europe, compared to 37% ( 9.6m) in 21. London listings were dominated by companies in the natural resources sectors, which in total raised 8.2bn and accounted for 58% of transactions on the London Stock Exchange. Glencore, the commodities trader s 6.9bn entrance into the FTSE 1, was the biggest deal in London, bolstering IPO values in the Square Mile during 211. The top three London listings, Glencore, Vallares, the oil and gas venture, and Justice Holdings, an investment company, accounted for more than 9bn of the proceeds raised in London. Two of these, Vallares and Justice Holdings, were of special purpose acquisition companies. Privatisations of government-owned assets in Spain and Poland in the summer of 211 raised over 5bn with the Iberian discount supermarket retailer Dia, which has a strong presence in emerging markets, adding a further 2.4bn to the total proceeds raised in Europe in 211. Global overview In a year which saw serious threats to the stability of the Eurozone, the Arab Spring and the downgrade of the US credit rating by Standard & Poor s, strain was put on global capital markets, disrupting the IPO plans of companies across all the major capital markets. This was evident in the market volatility indices in the US, the UK and Hong Kong, which hit two-year highs in August IPO Watch Europe 211

5 Despite the turbulent market conditions, in the US a total of 134 raised 25.6bn compared to 168 floats generating 29.1bn in 21 (which also included the 11.6bn re-privatisation of General Motors). US IPO markets experienced a surge in activity in the first half of 211 with the return of larger deals, including HCA Holdings and Kinder Morgan. The year finished strongly with the of Groupon, Michael Kors and Zynga boding well for 212. Greater China was the leading global IPO centre, hosting 42 and raising 57.2bn during 211. However, this represented a 42% drop in value compared to 21. Hong Kong continued to build its reputation as a go to place for luxury brand and was given a further boost with a number of high profile companies coming to market including Prada, which floated in June 211 raising 1.5bn. Outlook for 212 companies will have to ensure that the groundwork is completed well in advance so they can be opportunistic should an IPO window open. Other lessons learned in 211 include the need for selling shareholders to be realistic about company valuation and to ensure that the business is supported by a compelling equity story to attract potential investors. Although there have been some encouraging signs at the start of this year, exactly when markets will pick up again is uncertain and the Olympics may be well under way by the time the IPO market gets out of the starting blocks and into its stride. Figure 1: Volume of 8 Whilst we expect market volatility to continue into 212, we expect an IPO window to emerge. To be opportunistic when market conditions are favourable, companies need to ensure that the groundwork is completed well in advance. Figure 2: value of 9, As 211 drew to a close, the continued uncertainty of the Eurozone significantly disrupted the European capital markets. However, in the first few weeks of 212, we have seen some optimism return for IPO prospects with the London IPO of Ruspetro and a spate of launching in the US, including the much publicised Facebook IPO. This reflects some easing of the tough market conditions that plagued the end of 211 and has been further boosted by the rally in stock market indices around the world in early 212. Whilst we expect market volatility to continue into 212, there will be periods when market conditions will be favourable for. In this climate, Volume of , 6, 45, 3, 15, 8,449 13,953 7,112 26,286 26, IPO Watch Europe 211 5

6 by quarter European capital markets saw a poor first quarter of 211 with deal values plummeting by 71% from 1,115m in Q4 21 to 2,96m in Q The number of also fell by 26% from 129 listings in Q4 21 to 95 in Q1 211 with London hosting the lion s share of deals in the first quarter. Throughout the early 211 market conditions remained fragile with growing uncertainty as a result of political and economic unrest in a number of countries leading to the postponements of a number of large floats such as BILT Paper and Topaz Energy and Marine. The markets continued to endure the fallout in the second quarter from heightened concerns over Greece, Spain and Portugal. However, despite the increasing turbulence in the capital markets, European exchanges hosted 136 listings raising 13,295m in Q2 211 compared to 89 listings raising 9,14m in Q2 21. Companies in the Basic Resources, Mining and Oil and Gas sectors dominated the European IPO market in Q2 211 with the of Glencore, the commodities trader, and Vallares, the oil and gas venture, raising a total of 8,49m, accounting for 61% of the total quarterly proceeds. The year ended with a disappointing fourth quarter as volatility continued to destabilise the already fragile markets. The last quarter of 211 saw 78 raising only 866m, a 4% decrease in transaction volume and an 91% drop in offering values compared to 129 in Figure 3: Volume of Number of Q1 Q2 Q3 Q4 21 Figure 4: value of Q4 21 that raised 1,115m. London dominated activity in Q4 211 raising 8m, 92% of total European IPO value, with the IPO of Polymetal ( 421m) accounting for 49% of the quarter s IPO proceeds across all the European exchanges Q1 Q2 Q3 Q IPO activity in Q3 211 compared positively to the same quarter in the prior year with 121 companies raising 9,37m versus 85 in Q3 21 raising 2,479m. Of the money raised in Q3 211, 7,416m was generated from four : 5,38m came from the July privatisations of government-owned assets in Spain and Poland and 2,378m from the IPO of Dia, the Iberian discount supermarket retailer. The later part of Q3 211 was significantly affected by increasing economic uncertainties in the European markets as was evidenced by the postponement of the Spanish national lottery IPO in September , 12, 1, 8, 6, 4, 2, 4,678 9,14 2,479 1,115 Q1 Q2 Q3 Q4 2,96 13,295 9, Q1 Q2 Q3 Q IPO Watch Europe 211

7 Major The total money raised by the top ten increased by 5,194m, or 41% from 12,816m in 21 to 18,1m in 211. The contribution of the top ten to total money raised in Europe rose from 49% in 21 to 68% in 211, reaching similar levels to those achieved in 29 (72%). The London listing of Glencore, the world's largest commodities trading company, raised 38% of the top ten s contribution to value. The Glencore listing was the largest IPO in Europe since Electricité de France raised 7bn on the Euronext exchange in 25. Of note is that 211 featured a number of banking in the top ten for the first time since 27 (VTB Bank in London) and 28 (Commercial Bank of Qatar in London). Two of these, Bankia and Banca Cívica, were hosted in Spain in Q3 211 and relate to the privatisation of Spanish government holdings. The retail sector was boosted by the 2,378m raised by Dia, the Iberian discount supermarket group, which has a strong presence in emerging markets. Following the London float of Vallar in 21, a special purpose acquisition company set up by Nathanial Rothschild to fund mining acquisitions, two further investment companies successfully floated in 211. They were Justice Holdings, the cash shell set up by Nicolas Berggruen (the backer of hedge fund, GLG, and Pearl Insurance) and Martin Franklin; and Vallares, the cash shell founded by former BP CEO, Tony Hayward, and Nathaniel Rothschild targeting oil and gas acquisitions in emerging markets. Ten largest : 211 (ranked by money raised) Company Money raised m Exchange Sector Country of origin Glencore 6,867 London Basic Resources Switzerland Bankia 3,92 BME Banks Spain Dia 2,378 BME Retail Spain Jastrzębska Spółka Węglowa 1,346 Warsaw Mining Poland Vallares 1,182 London Investment Company UK Justice Holdings 1,63 London Investment Company UK Banca Cívica 6 BME Banks Spain OJSC Phosagro 53 London Chemicals Russia Nomos Bank 497 London Banks Russia Aker Drilling 455 Oslo Oil & Gas Norway Total 18,1 Ten largest : 21 (ranked by money raised) Company Money raised m Exchange Sector Country of origin Enel Green Power 2,264 Italy and Spain Utilities Italy PZU 1,99 Warsaw Insurance Poland Essar Energy 1,485 London Utilities India Gjensidige Forsikring 1,356 Oslo Insurance Norway Amadeus 1,317 Spain Technology Spain Pandora 1,227 OMX Personal & Household Goods Denmark Tauron Polska Energia 1,26 Warsaw Utilities Poland Vallar 822 London Investment Company Channel Islands Mail.Ru Group 669 London Media Russia Kabel Deutschland Holding 66 Deutsche Börse Telecommunications Germany Total 12,816 IPO Watch Europe 211 7

8 Major EU-regulated and exchange-regulated markets EU-regulated markets were dominated by a few large deals while the number of on exchange-regulated markets soared EU-regulated Despite a 9% fall in the volume of transactions, EU-regulated markets saw a 5% increase in value raised in 211. Conversely exchange-regulated markets experienced an increased volume of transactions (24%) but raised less money (33%). These trends differed to those of 21, where EUand exchange-regulated markets both faced overwhelmingly positive uplifts in volumes and values from 29 s figures. EU-regulated markets hosted 118 raising 24,695m in 211. This accounted for 27% of total in 211 and 93% of the total money raised. The top two European markets, London s Main market and BME (Spanish Stock Exchange) were the only EU-regulated exchanges raising more money in 211 than in 21. London again led the European capital markets in terms of value, with 11 raising 14,14m, reaffirming its place as the leading European market and a key international financial centre. The amount raised in London increased by 3,585m (or 34%) in 211, though activity was buoyed by the 6,867m listing of Glencore in May 211 contributing 49% of the value raised in London. London s market share by offering value in Europe increased from 4% in 21 to 53% in 211, although its market share by volume fell from 3% to 24%. This was largely due to a rise in low value transactions on Warsaw s NewConnect market. The Spanish Stock Exchange displayed the largest increase in activity relative to 21, with the value of more than tripling from 1,562m in 21 to 6,83m in 211. The top two Spanish, together worth 5,47m, raised 9% of the Spanish proceeds in 211. These were Dia, the Iberian retailer and Bankia, which was formed as a result of the union of seven Spanish financial institutions. It is notable that Bankia raised funds in response to new government rules on bank capital levels following the global financial crisis. The Warsaw Stock Exchange ranked third by IPO value, with 31 raising 2,67m, although the exchange saw a 45% drop in money raised year on year, while the number of transactions rose by 19%. Warsaw benefited from the 1,346m raised by the privatisation of the state-controlled Polish coking coal company, Jastrzębska Spółka Węglowa, which was the fourth largest IPO of 211. Oslo Børs, NASDAQ OMX, NYSE Euronext and the SIX Swiss Exchange all experienced drops in volume and value from 21 to 211. These four exchanges raised a combined total of 4,876m from 39 transactions in 21 whereas 27 deals raised a mere 882m in 211. This was a drop of 31% by volume and 82% by value. The Deutsche Börse, Borsa Italiana Main and Wiener Börse saw their combined number of transactions increase by 5% from a low base of 12 in 21 to 18 in 211, though the money raised fell 48% from 4,396m to 2,35m. Exchange-regulated Exchange-regulated markets hosted 312 raising 1,796m in 211. This was a 24% rise in volume but a 33% fall in value compared to 21 when 25 transactions completed raising 2,696m. Exchange-regulated markets accounted for 72% of total and 7% of total offering value in 211. London s AIM market topped the table for money raised with 6 transactions (only two more than in 21) raising 516m, 56% less than last year s total of 1,18m. AIM contributed 29% of the money raised in exchangeregulated markets in 211, down from 44% in IPO Watch Europe 211

9 The top three AIM were all oil and gas exploration companies. Trapoil, the largest AIM IPO of the year raising 69m, focuses on exploration on the UK Continental Shelf, Bayfield, which raised 61m, focuses on exploration in Trinidad and Tobago and 3Legs Resources, which raised 56m, focuses on exploration in Poland and Germany. Oslo Axess, WSE NewConnect and the Irish Stock Exchange all experienced growth in both the number of transactions they hosted and the amount of money raised. Oslo s nine raised 264m, although 93% ( 245m) related to the IPO of Sevan Drilling, a deepwater drilling company. NewConnect s IPO volumes doubled from 86 in 21 to 172 in 211 and its money raised more than tripled from 4m to 133m. The Irish Stock Exchange hosted no transactions in 21 and only one in 211, Continental Farmers Group, worth 17m (a dual listing with London AIM). Luxembourg EuroMTF, London SFM, Deutsche Börse Entry Standard, BME (Spanish Stock Exchange) MAB and Borsa Italiana AIM all experienced a decline in both the number of they hosted and the amount of money they raised. In 21, 69 transactions raised 1,298m whereas in 211 these figures had dropped by 49% and 41% respectively to 35 transactions raising 768m. Three transactions accounted for 4m, or 52%, of the total money raised across the five exchanges: Doric Nimrod Air Two, an investment company, raised 154m on London SFM; and Catcher Technology Co and Neo Solar Power, both suppliers of industrial goods and services, raised a combined total of 246m on Luxembourg MTF. NYSE Euronext Alternext saw a 1% fall in volumes year on year, from 21 to 19 transactions, but a 52% rise in value from 73m to 111m. 43m of this money was raised by the IPO of Tekka Group, the French healthcare provider. In contrast, NASDAQ OMX First North saw a 89% rise in volumes from 9 to 17 but an 82% fall in values from 22m to 4m. Major EU-regulated and exchange-regulated markets Stock exchange Company Company EU-regulated London (Main) , ,34 BME (Spanish Stock Exchange) 1 4 6,7 2 1,514 WSE (Main) 31 2, ,77 Deutsche Börse 13 1, ,297 Oslo Børs ,362 Borsa Italiana (Main) ,99 Wiener Börse NASDAQ OMX (Main) ,7 NYSE Euronext (Euronext) SIX Swiss Exchange EU-regulated sub-total , ,59 Exchange-regulated London (AIM) ,18 Luxembourg (EuroMTF) Oslo Axess London (SFM) WSE (NewConnect) NYSE Euronext (Alternext) Deutsche Börse (Entry Standard) Ireland (ESM) BME (Spanish Stock Exchange) MAB Borsa Italiana (AIM) NASDAQ OMX (First North) Exchange-regulated sub-total , ,696 Europe total 1, , , by market are shown gross of dual listings. However these are netted off in the Europe total number and offering values. International Consolidated Airline's Group dual listed on London (Main) and BME (Spanish Exchanges) but raised no money. Continental Farmers Group dual listed on London (AIM) and Ireland (ESM) raising 17m. Enel Green Energy dual listed on Borsa Italiana (Main) and BME (Spanish Exchange) in 21 raising 2,264m. 2. Cumulatively the WSE NewConnect raised 148m in 211 and 51m in 21. However some of the NewConnect transactions raised an amount that rounded to a lower figure and the total above is the sum of these rounded values. IPO Watch Europe 211 9

10 1 IPO Watch Europe 211

11 Other markets Quarterly IPO Watch Europe survey tracks the volume and value of across all the main European exchanges. However certain junior markets are not included within the Quarterly IPO Watch Europe survey. This section discusses the nature and activity of those markets. First Quotation Board First Quotation Board is the Deutsche Börse s junior market and, along with Entry Standard, comprises the exchangeregulated platforms of Deutsche Börse. It is primarily aimed at qualified investors. The First Quotation Board was the European junior market with the highest volume of in 211. However, the exchange was the only junior market featured in our survey to see a drop in money raised from 5m in 21 to 35m in 211. Deutsche Börse announced at the beginning of 212 that First Quotation Board will be discontinued in its current form at some point in the second half of 212. PLUS PLUS is a small and mid-cap stock exchange in London. PLUS operates two primary markets (the PLUS-listed and PLUS-quoted markets) as well as a secondary trading market (PLUStraded). In 211, the PLUS exchange hosted 21 raising 7m, an increase of 5% by volume and 4% by value compared to 21. Germany Stock exchange Deutsche Börse EU-regulated markets: London Stock exchange NYSE Euronext Stock exchange Prime Standard 12 1, ,297 General Standard 1 2 Deutsche Börse exchange-regulated markets: Entry Standard First Quotation Board (FQB) Germany total 217 1, ,463 Main Market 39 13, ,34 AIM ,18 London (SFM) PLUS London total , ,524 Alternext Euronext Marché Libre NYSE Euronext total The Marché Libre The Marché Libre is an exchangeregulated market operated by NYSE Euronext. It addresses small and medium-sized firms seeking a public listing without facing the levels of regulation associated with NYSE Euronext senior markets. Marché Libre hosted 14 in 211, raising a total of 3m. IPO volume dropped 48%, from 27 in 21, though money raised tripled from 1m to 3m. IPO Watch Europe

12 International International covers the listings of companies with substantial operations outside the European countries covered by this survey. Figure 5: Volume of international by country of origin of international companies in Europe showed a sharp decline in 211 in the absence of any real blockbuster listings. The money raised by companies with operations outside Europe decreased by 48% from 8,714m in 21 to 4,597m in 211. However, the volume of international remained relatively stable with 96 transactions in 211 and 1 in 21. A wave of companies with significant operations in Russia made up the top five international deals, all of which were hosted in London. Together they contributed 49% of the money raised from international in % 6% 7% 1% 19% 12% 12% India China USA Russia Ukraine South Africa Other PhosAgro, the global phosphate-based fertilizer producer, was the leading international IPO in 211, raising 53m on the London Main market in July 211. The IPO of Nomos Bank, a fast growing Russian bank, raised 497m. Both achieved a place in the top ten European in 211. Polymetal International PLC, the precious metals producer in Russia and gold producer in Kazakhstan, was the only significant IPO in Q It raised 421m, just missing out on a place in the top ten European for 211. Consistent with historical trends, India was the prime source of international measured on volume, mainly through GDR offerings in Luxembourg. However, these listings only accounted for 5% of international offering value. Figure 6: Value of international by country of origin 3% 4% 4% 5% 5% 6% 7% 7% 59% Russia Taiwan Tanzania Brazil India China Ukraine UAE Other Top five international Company Money raised m Exchange Sector Country of origin OJSC PhosAgro 53 London Chemicals Russia Nomos Bank 497 London Banks Russia Polymetal International 421 London Mining Russia Etalon Group Limited 398 London Real Estate Russia Global Ports Investments 371 London Oil & Gas Russia Total 2, IPO Watch Europe 211

13 Figure 7: Volume of international by sector 16% 2% 4% 4% 5% 18% 6% 9% 18% Figure 8: Value of international by sector 2% 5% 4% 22% 7% Oil & Gas Industrial Goods & Services Mining Food & Beverage Basic Resources Technology Personal & Household Goods Utilities Other Oil & Gas Industrial Goods & Services Real Estate The oil and gas sector generated the highest volume and highest value of international in 211 with 2% of volume and 22% of value raised. The mining sector, together with industrial goods and services, was the joint second largest sectors by volume, each contributing 18% of international. The majority of the international oil and gas and mining sector listings were hosted on either the London Main or AIM markets, consolidating London s position as a hub for companies operating in these sectors. However, consistent with previous years, there was a spread of international among the different industry sectors. London remained the primary market for international in Europe, accounting for 79% of all international funds and 56% of IPO volume. In 211, 54 international transactions raised 3,658m, a 36% fall from 21's figure of 5,713m. International accounted for 26% of money raised in London in 211, compared with 54% in % 11% 14% Chemicals Mining Banks Food & Beverage 12% 12% Investment Company Personal & Household Goods Other IPO Watch Europe

14 14 IPO Watch Europe 211 Picture here

15 Value of equity trading Total trading (211) Figure 11: Value of equity trading 211 8,755bn 8% 4% London Stock Exchange Group 8% 31% NYSE Euronext Deutsche Börse 13% BME (Spanish Exchanges) SIX Swiss Exchange 16% 2% OMX Other Figure 12: Value of equity trading 21 Total trading (21) 8% 8% 4% 29% London Stock Exchange Group NYSE Euronext 6,654bn 14% Deutsche Börse BME (Spanish Exchanges) SIX Swiss Exchange OMX 16% 21% Other Source: World Federation of Exchanges Note: London Stock Exchange Group comprises the London Stock Exchange and Borsa Italiana Equity trading saw a recovery in 211 with the trading values rising by 32% from 6,654bn in 21 to 8,755bn in 211. Three quarters of the European exchanges saw a rise in the value of their equity trading. The top five stock exchanges accounted for 88% of all equity traded in Europe in 211, broadly in line with 21. London maintained its position as the leading market with trading values increasing by 37% from 1,949bn in 21 to 2,665bn in 211. Trading on NYSE Euronext increased by 28% reaching 1,776bn in 211 compared to 1,388bn in 21. Equity trading on Deutsche Borse also grew by 32% reaching 1,431bn in 211 from 1,88bn in 21. Although Ireland had one of the lowest equity trading values, it experienced the largest growth almost tripling in value from 7,28m in 21 to 18,98m in 211. Three exchanges saw a drop in trading volumes with Athens experiencing a 51% drop in its equity trading, Luxembourg falling 44% and the Wiener Börse decreasing by 13%. The relative proportions of the total equity traded across the larger European exchanges such as the London Stock Exchange Group and NYSE Euronext remained broadly consistent with last year s performance. IPO Watch Europe

16 by sector Natural Resources, comprising companies operating in the Basic Resources, Mining and Oil & Gas sectors, dominated IPO money raising in Europe during 211. Some 39% of proceeds were represented by Natural Resources companies, raising 1,44m compared to 1,591m in 21. The largest IPO of the year, Glencore, accounted for 26% of total proceeds raised in Europe in 211 and 99.5% of the value raised by the Basic Resources sector, driving this sector to take the top spot by value raised. There were a total of 11 of companies in the Basic Resources sector in 211, six of which took place on the London Stock Exchange. Average value of proceeds raised by Basic Resources companies in 211 was 627m. The of Bankia and Banca Cívica in Spain in July 211 raised a combined 3,692m, propelling the Banking sector to second spot with total IPO proceeds reaching 4,452m compared to only 5m in 21. There were a total of eight deals in the Banking sector in 211 compared to only two in 21. BME, London Stock Exchange and Warsaw Stock Exchange each hosted two with the remaining two deals hosted on Luxembourg Stock Exchange and OMX. The average deal value in the Banking sector was 556m. The of Vallares and Justice Holdings in London raised 2,245m, 59% of the total proceeds raised by the Investment Companies sector in 211. The Investment Companies sector reached third place for both IPO value and IPO volume in 211, though total volume was 31% down on 21 s figure of 48. The London Stock Exchange led the activity in the sector with 23 out of the 33 Investment Company in 211. The average amount of proceeds raised by Investment Companies in 211 was 114m. The Industrial Goods & Services sector retained its top position by IPO volume for the fifth consecutive year. The sector hosted 89 out of the total 43 across all the European exchanges in 211, a 41% increase in the number of deals from 21. Total money raised in this sector of 1,63m remained relatively flat in 211 compared to 1,689m raised in 21. The majority of floats in this sector (62%) were hosted on the Warsaw Stock Exchange with an average transaction value of less than 1m, cumulatively raising 73m. London and Luxembourg exchanges each hosted nine floats raising 394m and 331m, respectively. The majority of these companies (72%) had their main operations outside Europe. The number of listings in the Technology sector increased by 29% from 35 in 21 to 45 in 211, although money raised dropped significantly from 1,75m in 21 to 21m in 211. Consistent with 21, the majority of in this sector were hosted on the Warsaw Stock Exchange, with 25 raising 8m, followed by the London Stock Exchange hosting 7, raising 46m. Technology company on average raised 4.7m. The Oil & Gas sector experienced a significant increase in activity and moved up to seventh positions in the rankings, with 32 in 211 compared to 15 in 21. Europe s tenth largest IPO was the Oil & Gas company, Aker Drilling, on the Oslo Stock Exchange, which raised 455m. The sector raised 1,649m in 211 compared with 331m in 21. The largest shift in the ranking was witnessed by the Health Care sector, which moved from 17th place in 21 to seventh in 211. The sector hosted 21 in 211 compared to only five in 21, driven by 11 on NewConnect and seven on OMX. However, the total value raised by the sector fell by 67% from 284m in 21 to 94m in IPO Watch Europe 211

17 by sector by value raised Sector Value raised ( m) 211 Value raised ( m) 21 Basic Resources 6,9 31 Banks 4,452 5 Investment Companies 3,792 4,11 Retail 2,513 1,629 Mining 1,855 1,229 Oil & Gas 1, Industrial Goods & Services 1,63 1,689 Real Estate Chemicals Personal & Household Goods 463 1,422 Food & Beverage Financial Services Technology 21 1,75 Pharmaceuticals & Biotech Automobiles & Parts Media 137 1,117 Travel & Leisure Health Care Utilities 64 4,925 Construction & Materials Telecommunications Insurance 4 3,512 Total 26,491 26,286 by sector by volume Sector Company 211 Company 21 Industrial Goods & Services Technology Investment Companies Oil & Gas Financial Services Personal & Household Goods Health Care 21 5 Mining 2 23 Pharmaceuticals & Biotech Travel & Leisure 16 8 Food & Beverage Construction & Materials Media Real Estate Utilities Basic Resources 11 4 Automobiles & Parts 11 1 Retail 8 17 Banks 8 2 Telecommunications 6 1 Insurance 2 4 Chemicals 1 3 Total IPO Watch Europe

18 Developments in regulation and markets Prospectus Directive amendment The amended Prospectus Directive should take effect on 1 July 212. It introduces proportionate disclosure regimes for rights issues, small and medium-sized companies and companies with reduced market capitalisation. During 211, the European Securities and Markets Authority made recommendations to the European Commission on the detailed measures to be adopted for implementation. These included the proposal that proportionate, i.e. less, disclosure should not be available on an IPO or initial admission to trading on a regulated market. This regime should reduce the cost of further issues of capital to listed companies. Developments in London The conditions for the inclusion of an issuer in the stock market indices is an area that has been receiving particular attention in the UK. The FTSE index committee previously changed the rules to require non-uk incorporated companies to have a 5% free float, as well as acknowledgement of adherence to UK market practices, in order to secure inclusion in the UK series of indices. This would thus gain them entry to the FTSE 1, for example. FTSE have now introduced rules to require UK incorporated companies to have a minimum 25% free float in order to be index included even though the FSA will admit, by exception, companies to premium listing with a lower percentage free float. Consideration is also being given to using the index rules to impose governance standards, though proposals have yet to be published. Transparency Directive review Initially in response to concerns from smaller listed companies, the European Commission has brought forward proposals to reduce the burden of ongoing disclosure for all companies traded on regulated markets. Examples such as abolishing the requirement for an interim management statement, or quarterly report, have been tabled but legislation to introduce these changes is still some way off. Market Abuse Directive review In 211 the European Commission brought forward proposals for Market Abuse Regulation that would extend the scope of the existing framework covering insider dealing and market manipulation. The regulation would cover any financial instrument traded on a multilateral trading facility (MTF) or on an organised trading facility to avoid any regulatory arbitrage between trading venues. In addition, proposals have been made to criminalise the offences of insider dealing and market manipulation across the EU. Both of these proposals now proceed to the next step in the European legislative process, engaging with the Member States and the European Parliament. However, formal adoption is still some time in the future. Market developments 211 saw the respective failed mergers of the London and Toronto Stock Exchanges and of the Singapore and Australian Stock Exchanges. In addition, the merger plans of NYSE Euronext and Deutsche Börse were blocked by the European Commission at the beginning of IPO Watch Europe 211

19 IPO Watch Europe

20 Global perspective Region Greater China 1, , ,624 Europe 43 26, ,286 US , ,64 Latin America 21 6, ,727 Singapore 23 5,35 3 3,533 Japan , ,796 Australia 15 1, ,441 Gulf Cooperation Council , The offering value of in these markets includes over-allotment or greenshoe amounts. 2. Companies from Greater China are able to list a different class of shares on the different Greater China exchanges. In these cases, the data above includes the value of shares listed on each exchange and the listings as separate. In 211 global IPO activity lost much of its momentum. The stormy economic conditions were sufficiently far-reaching to create an impact in all international markets. All major markets experienced flat or declining IPO money raisings. In 211 global IPO activity lost some of the momentum from 21. The stormy economic conditions were sufficiently far-reaching to create an impact in all international markets. Europe was the only region to experience growth (13% and 1% respectively) for both volume and value. Greater China maintained its position as the top region by value, despite a 42% fall in the money raised from 98,624m in 21 to 57,24m in 211. It hosted 42 compared with Europe s 43, thereby demonstrating a much larger average transaction value of 137m in comparison to Europe s 77m. The US dropped to third spot despite a strong final quarter, with values falling by 12% and volumes decreasing by 2% in 211 compared with 21, although 21 benefited from the 11.9bn raised by General Motors. Japan experienced an 81% decline in money raised from 7,796m in 21 to 1,495m in 211 following the impact of the earthquake in March 211. In contrast, Singapore saw a 51% increase in money raised from 3,533m in 21 to 5,35m in 211 despite a 23% fall in IPO volumes. 2 IPO Watch Europe 211

21 IPO activity in Greater China Hong Kong maintained its position as the largest capital market in Greater China during 211 in terms of IPO funds raised. However, the total funds raised from Hong Kong in 211 was 25.1bn, 43% less than in 21. The number of totalled 9, down 13% compared to the prior year. The Greater China IPO market was affected by external factors in 211. The volatility in the global equity markets dragged indices in Greater China down by as much as 2% throughout the year with a consequential negative impact on the price/earnings ratios of. Despite the reduction in IPO volumes and funds raised in 211, the Hong Kong IPO market is still expected to be vibrant due to sufficient liquidity and the continuous growth of China s economy. In Mainland China total IPO volumes were also reduced. However domestic small and medium sized enterprises remained the main driving force in the IPO market. A total of 11.7bn was raised through in Shanghai, a decline of 45% compared to 21. While a total of 2.1bn was raised on the Shenzhen Stock Exchange, a reduction of 4% from 21. Kennedy Liu, Partner, PwC Hong Kong: "Global companies and luxury brands are increasingly looking to expand in the Asia Pacific region, especially China. To do so, these companies need additional funds. And where better to tap the market for capital than Asia. Listing in the region is also a good way for these international companies to enhance their brand and image in markets where they're not as well known. The uniqueness of Hong Kong's position makes the city an ideal platform for these global companies to meet with investors from China." Comparison with Greater China Stock exchange Europe total 43 26, ,286 Hong Kong , ,618 Shenzhen 243 2, ,318 Shanghai 39 11, ,69 Taiwan Greater China total 42 57, ,624 Number of Figure 14: IPO volume and offering value 1, value Number of 1, 8, 6, 4, 2, 1. The offering value of in Greater China includes over-allotment or greenshoe amounts. 2. Companies from Greater China are able to list a different class of shares on the different Greater China exchanges. In these cases, the data above includes the value of shares listed on each exchange and the listings as separate. 1. The number of on Hong Kong Stock Exchange excludes transfers from GEM to Main Board. IPO Watch Europe

22 IPO activity in the US While the US IPO markets had strong momentum in the first half of the year and a resurgence of activity in the fourth quarter, the markets saw an overall decrease in activity in 211. However, there are some positive signs regarding equity markets as we head into 212. A total of 134 generated 25,581m compared to 168 raising 29,64m in 21, representing a 2% decrease in volume and a 12% decrease in value when compared to 21. However, the 21 proceeds were skewed by the second largest US IPO in history the General Motors (GM) float that raised 11,567m. Despite the decline in volume and value of offerings, average deal size increased by 1% from 173m in 21 to 191m in 211. The US IPO market witnessed the return of some larger deals in 211, with a total of three in excess of 1bn, compared to 21 which only produced the GM IPO. were well diversified across industries with Technology leading the way with 21% of total proceeds, followed closely by Energy (17%), Healthcare and Business Services (14% each), Financial Services (13%) and Consumer Products (11%). Henri Leveque, Partner, PwC US: The US IPO market reflects a tale of two halves in 211. On the back end of a solid recovery towards the end of 21, the year kicked off with robust IPO activity throughout the first half. Although activity was slow for the majority of the second half, a few noticeable market windows opened in the fourth quarter, contributing to the year ending on a stronger note. This renewed confidence in the US IPO market, combined with the strong pipeline of offerings provides a positive outlook for the IPO markets in 212. Figure 15: IPO volume and offering value 35 5, 3 4, 25 Number of 2 3, 15 2, 1 1, value Number of Investment company sponsors-backed, which encompass deals backed by private-equity and venture capital firms, continued to lead the market activity with 87 of the 134 (65%) raising 19,967m (78%), compared to 128 deals (76%) raising 13,293m (46%) in 21. Although completed declined, interest in the IPO market was strong with 274 companies filing initial registration statements in 211. Of these offerings, 171 remained in the IPO pipeline at the end of 211, marking the largest IPO pipeline in several years. Comparison with the US Stock exchange Europe total 43 26, ,286 NYSE 68 18, ,94 Nasdaq 66 7, ,124 US total , ,64 22 IPO Watch Europe 211

23 IPO activity in Japan 211 saw a 6% increase in IPO volume in Japan, with the number of increasing from 22 in 21 to 36. However, this compares with around 15 each year between 2 and 27, highlighting that the market is yet to fully recover. Money raised by the 36 in 211 was 1,495m, 81% down on the 7,796m raised by 22 in 21. Therefore, although the number of in 211 was greater than 21, the average IPO size was much smaller. Nearly one third of the 211 were in the Information and Communication Technology (ICT) sector, and this trend is expected to continue into 212. Takahiro Nakazawa, Partner, PwC Japan: Markets are facing a lot of uncertainties heading into 212, such as the strength of the Japanese Yen, the sovereign debt crisis in Europe, and elections in the US, Russia, etc. The development and interaction of these factors will significantly affect the capital markets landscape in 212. It is consequently very difficult to anticipate how many will take place in Japan this year. However, given the circumstances, many Japanese market players expect that the number of will grow and there will be around 5 in 212. Figure 16: IPO volume and offering value Number of , 7, 6, 5, 4, 3, 2, 1, value Number of 1. The offering value of in Japan includes over-allotment or greenshoe amounts. Comparison with Japan Stock exchange Europe total 43 26, ,286 Tokyo Stock Exchange (Main) 9 1,7 6 7,522 JASDAQ Mothers Japan total 36 1, ,796 IPO Watch Europe

24 IPO activity in the Gulf Cooperation Council In 211, the number and total value raised through in the six nation Gulf Corporation Council (GCC) reduced to nine with a total value of 567m compared to 12 with a total value of 1,531m in the previous year, a 25% decrease in activity and 63% decrease in value. The year witnessed three in the United Arab Emirates, all in the first half of 211 and one IPO in Oman in Q4. Although the Kingdom of Saudi Arabia continued to outperform other GCC countries in the number and value of, with five floats during the year, it still underperformed compared to the previous year, with a decrease of 44% in the number of and a 65% decrease in the total value raised. Steve Drake, Partner, PwC Middle East: Regional IPO activity during the year has been difficult with both issuers and investors exhibiting caution regarding the right time and conditions to return to the market. As we are moving into 212, we are seeing improvements in confidence on the supply side and so would expect to see increased activity in certain regional markets during 212. We see a number of issuers beginning to prepare themselves for an IPO so that when the time is right, they are ready to act quickly. Figure 17: IPO volume and offering value 12 1 Number of value Number of 1,6 1,4 1,2 1, The low performance of the equity markets of the GCC throughout the year was driven by the regional political unrest, wider global economic instability and general investor caution resulting in a risk-averse attitude toward the equity markets. Investor lack of appetite for risk coupled with issuer reluctance to sell at perceived lower valuations contributed to a slow and stifled year in the equity markets. Until the situation begins to improve we would expect investor equity confidence in the region to remain low. Comparison with the Gulf Cooperation Council Stock exchange Europe total 43 26, ,286 Saudi Arabia UAE 3 19 Oman Bahrain Qatar 1 26 GCC total , IPO Watch Europe 211

25 IPO activity in Latin America The combined markets of the Latin American region saw a 7% increase in IPO value with 6,153m raised in 211, compared to 5,727m in 21. The number of transactions decreased from 22 in 21 to 21 in 211, a 5% fall. Like 21, 211 s activity was concentrated in Brazil. In 21 it accounted for 75% of value raised though in 211 this had decreased to 49%. The Colombia Stock Exchange saw its value increase tenfold from 24m in 21 to 2,43m in 211. The number of on the Santiago Stock Exchange quadrupled with a near proportionate increase in money raised as well, moving from one transaction raising 161m in 21 to four raising 732m in 211. In contrast, Mexico saw a decline of 67% and 66% respectively in both IPO volumes and values year on year. The market was held back in 21 in anticipation of the expected Petrobras deal. When it did finally come in September, market concerns were focused on issues in Europe which further delayed new Brazilian deals. Ivan Clark, Partner, PwC Brazil: 211 started promisingly enough on Latin American capital markets but soon felt the impact of the Eurozone crisis and sovereign credit rating downgrades. The region s generally healthy fast emerging economies could not decouple from the global capital markets. In Argentina, the nationalisation of the pension funds three years ago put a dampener on the market which has yet to lift. Prospects though are brighter. The Brazilian market, in particular, has a significant number of in the pipeline and offshore funds are waiting for the green light. As Brazil takes up its position as the world s sixth largest economy, its funding needs surpass the Brazilian Development Bank s capacity to meet all its capital requirements. The funds will need to be drawn from deeper wells. As such, the international capital markets will play an ever increasing role in partnering with Latin American countries as they emerge onto the world stage. Comparison with Latin America Figure 18: IPO volume and offering value 25 2 Number of value Number of 1, 9, 8, 7, 6, 5, 4, 3, 2, 1, Stock exchange Europe total 43 26, ,286 Brazilian 11 3, ,284 Colombia 4 2, Santiago Mexican ,17 Buenos Aires 2 61 Latin America total 21 6, ,727 IPO Watch Europe

26 IPO activity in Singapore With a positive economic outlook and the proposed merger with the Australian Stock Exchange, 211 started with much promise for the Singapore Exchange. However, as with other global exchanges, Singapore saw an overall reduction in the number of from 3 in 21 to 23 in 211 due to the uncertainty in the global economy which put paid to the plans of many private equity funds to realise their investments. Despite the decrease in IPO volumes, total funds raised increased from 3.5bn in 21 to 5.4bn mainly due to the two mega of Hutchison Port Holdings (HPH Trust), Hutchison Whampoa s container port assets, which raised 3.9bn and Mapletree Commercial Trust, a Singapore-focused real estate investment trust, which raised.5bn. Richard Sim, Partner, PwC Singapore: 211 was a volatile market for IPO activities. Although IPO proceeds were 1.8bn higher compared to 21, this was mainly due to the two mega of Hutchison Port Holdings and Mapletree Commercial Trust that raised an aggregate of 4.5bn. With the current market uncertainty due to the Eurozone debt crisis, the global capital markets are expected to remain volatile in 212. The outlook for the Singapore Exchange in 212 remains heavily dependent on stabilisation in Europe and US economic growth, which has been showing signs of recovery". Figure 19: IPO volume and offering value Number of value Number of 6, 5, 4, 3, 2, 1, Singapore remains an attractive listing venue for new issuers due to its low tax and favourable government policies. In further efforts to enhance its competitiveness, the Singapore Exchange has also already taken the first steps to exploit niche listings. With the introduction of REIT structures in 22 and business trust structures in 24, Singapore took the advantage and now boasts the largest market for those entities in Asia with 25 listed REITs. This specialisation helped the Singapore Exchange to secure the HPH Trust IPO and should create a source of ongoing IPO activity. Comparison with Singapore Stock exchange Europe total 43 26, ,286 Singapore total 23 5,35 3 3,533 The Singapore Exchange has publicly stated its desire to become an offshore Renminbi centre which could boost debt and equity issuance and liquidity. However regulatory approval for such offshore trading remains at the discretion of the Chinese Government. 26 IPO Watch Europe 211

27 IPO activity in Australia IPO activity on the Australian Securities Exchange hit a three-year high in 21, with around 1 floats raising more than 6.4 bn, including the two multi-billion euro of rail group QR National, which raised 2.5bn, and Westfield Retail Trust which raised 2.4bn. In 211, total funds raised fell to 1.2bn, the lowest annual total during the previous ten years, due to adverse economic conditions in Australia and uncertainty in the global economy creating low levels of investor confidence. However, IPO volumes remained relatively high, 15 in 211 compared to 98 in 21, as increased activity in the resources sector acted as a catalyst for more floats of mining services companies. This was largely confined to more junior exploration companies, with few above 36 million (US$5 million). In particular there have been a growing number of overseas junior exploration companies raising capital through listing to develop minerals projects in Africa, South America, Mongolia and Central Asia. There has been an increasing trend of overseas companies wishing to realise value from their Australian assets due to the current strength of the Australian dollar. This trend is expected to continue in 212 along with increased deal activity from Asia-based purchasers presenting an alternative exit route or financing at potentially higher valuations compared to those achieved through an Australian Securities Exchange listing. Following the Australian government s rejection of the proposed takeover of the Australian Securities Exchange by the Singapore Stock Exchange in March 21 on national interest grounds, the Australian Securities Exchange remains primarily a domestic Australian exchange focused on the natural resources sector. Growing retail investor demand for bonds, more corporate debt issuances, and the expected quoting of Commonwealth Government Securities, bodes well for the Australian Securities Exchange Interest Rate Securities market next year and a potential alternative to equity or quasi-equity financing for Australian corporates. Richard Savage, Partner, PwC Australia: "Equity issuance in Australia is currently at historic lows with market volatility and economic uncertainty discouraging Initial Public s. However there is a known and substantial IPO pipeline (primarily private equity exits) awaiting the next IPO window and emerging themes such as overseas resources players wishing to establish Australian listed vehicles and a push by the authorities and the local exchange to established a local listed corporate debt market. These latter factors may prompt some additional market activity in 212 irrespective of overall market conditions." Comparison with Australia Stock exchange Figure 2: IPO volume and offering value Europe total 43 26, ,286 Australia total 15 1, ,441 Number of value Number of 8, 7, 6, 5, 4, 3, 2, 1, IPO Watch Europe