Global IPO Market
INTRODUCTION
Global Stock Exchanges
(in terms of market capitalization in 2012)
London
(4th: USD 3,396.5bn )
New York
(1st: USD 14,085.9bn )
NASDAQ
(2nd: USD 4,582.4bn)
Tokyo
(3rd: USD 3,478.3bn )
Shanghai
(7th: USD 2,547.2bn )
Singapore
(21st: USD 765.1bn )
Shenzhen
(16th: USD 1,150.2bn )
Hong Kong
(6th: USD2,831.9bn)
Source: World Federation of Exchanges (as at December 2012)
Hong Kong Exchanges and Clearing Limited
Equity Markets 2012
Performance indicator
Market capitalisation
Number of listings
Value of share trading
Number of Electronic Order
Book (EOB) trades
Value/unit
% difference
(comparing to 2011)
USD 55 trillion
+ 15.1%
46,332
- 0.8%
USD 49 trillion
- 22.5%
9780 million
- 14.3%
Source: World Federation of Exchanges
Average Value of Trades
Source: World Federation of Exchanges
Global Funds Raised in 2012
(US$ million)
(US$ million)
Source: Hong Kong Exchanges and Clearing Limited
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
Top 5 preferred investment destinations
Top 5 preferred investment sectors % of investors*
1. United States
Financial services
51%
2. Mainland China and Hong Kong
Consumer retail
35%
3. Brazil
Consumer products
27%
4. Other Asia-Pacific countries
Oil and gas
27%
5. United Kingdom
Technology
21%
* Featured most often in investors’ top three in the survey conducted by Ernst & Young
Source: Ernst & Young, “Right team, right story, right price”
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