IPO Watch Europe 2011

www.pwc.co.uk
www.pwc.com

IPO Watch Europe
2011

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

Contents

Foreword 4
Europe — Review of the year
IPOs by quarter 6
Major IPOs 7
Major EU-regulated and exchange-regulated markets 8
Other markets 11
International IPOs 12
Value of equity trading 15
IPOs by sector 16
Developments in regulation and markets 18
Global perspective 20
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 30

IPO Watch Europe 2011 3

A positive start to 2011 A few large transactions
Foreword followed by economic and
political uncertainty
dominated the European
markets
A bright beginning to 2011 proved to be The year was dominated by a few large
something of a false dawn for the IPO transactions with the top six European
market with the year being plagued by deals raising €16bn, 60% of total IPO
delays and postponements due to market proceeds across Europe, compared to
volatility resulting from the Eurozone 37% (€9.6m) in 2010.
crisis. Nevertheless, some major floats
took place in Europe, with London, London listings were dominated by
Madrid and Warsaw all hosting companies in the natural resources
Despite a lacklustre end to high-profile IPOs. sectors, which in total raised €8.2bn and
accounted for 58% of transactions on the
2011, a total of 430 IPOs Despite the lacklustre end to the year, a London Stock Exchange. Glencore, the
across Europe raised total of 430 IPOs across Europe raised commodities trader’s €6.9bn entrance
€26.5bn, a 13% increase in €26.5bn in 2011 a 13% volume increase into the FTSE 100, was the biggest deal
and just a 1% rise in money raised in London, bolstering IPO values in the
volume and a 1% rise in compared to 2010. However, pressure on Square Mile during 2011. The top three
money raised compared pricing partly contributed to average London listings, Glencore, Vallares, the
to 2010. deal values dropping by 10% from €86m oil and gas venture, and Justice
in 2010 to €77m in 2011. Holdings, an investment company,
accounted for more than €9bn of the
IPO values were skewed significantly proceeds raised in London. Two of these,
towards the first half of the year as Vallares and Justice Holdings, were IPOs
markets failed to ignite after the summer of special purpose acquisition companies.
as hoped, due to the heightened
economic uncertainty in Europe. A total Privatisations of government-owned
of €16.3bn was raised in the first half of assets in Spain and Poland in the
2011 across the European markets summer of 2011 raised over €5bn with
compared to €10.2bn in the last six the Iberian discount supermarket
months of 2011. retailer Dia, which has a strong presence
in emerging markets, adding a further
More than half of money raised in €2.4bn to the total proceeds raised in
Europe, €14.1bn, was generated on the Europe in 2011.
London Stock Exchange, despite London
hosting only a quarter of the IPOs across Global overview
Europe. Warsaw hosted the most
transactions – 203 in total, albeit at a low In a year which saw serious threats to the
average value. 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 2011.

4 IPO Watch Europe 2011

Despite the turbulent market conditions, companies will have to ensure that the
in the US a total of 134 IPOs raised groundwork is completed well in Whilst we expect market
€25.6bn compared to 168 floats advance so they can be opportunistic
volatility to continue into
generating €29.1bn in 2010 (which also should an IPO window open. Other
included the €11.6bn re-privatisation of lessons learned in 2011 include the need 2012, we expect an IPO
General Motors). US IPO markets for selling shareholders to be realistic window to emerge. To be
experienced a surge in activity in the about company valuation and to ensure
opportunistic when
first half of 2011 with the return of that the business is supported by a
larger deals, including HCA Holdings compelling equity story to attract market conditions are
and Kinder Morgan. The year finished potential investors. favourable, companies
strongly with the IPOs of Groupon,
Although there have been some need to ensure that the
Michael Kors and Zynga boding well
for 2012. encouraging signs at the start of this groundwork is completed
year, exactly when markets will pick up well in advance.
Greater China was the leading global again is uncertain and the Olympics may
IPO centre, hosting 420 IPOs and raising be well under way by the time the IPO
€57.2bn during 2011. However, this market gets out of the starting blocks
represented a 42% drop in value and into its stride.
compared to 2010.

Hong Kong continued to build its
reputation as a ‘go to’ place for luxury
brand IPOs and was given a further
boost with a number of high profile
companies coming to market including
Prada, which floated in June 2011 Figure 1: Volume of IPOs Figure 2: Offering value of IPOs
raising €1.5bn.

Outlook for 2012 800 90,000

As 2011 drew to a close, the continued 700
uncertainty of the Eurozone significantly 75,000
disrupted the European capital markets. 600
However, in the first few weeks of 2012,
Offering value (€m)

60,000
Volume of IPOs

we have seen some optimism return for 500
IPO prospects with the London IPO of
Ruspetro and a spate of IPOs launching 400 45,000
in the US, including the much publicised
Facebook IPO. This reflects some easing 300
of the tough market conditions that 30,000

plagued the end of 2011 and has been 200
further boosted by the rally in stock 15,000
market indices around the world in 100
early 2012. 771 295 126 380 430 80,449 13,953 7,112 26,286 26,491
0 295 126 380 430 0 295 126 380 430
Whilst we expect market volatility to 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

continue into 2012, there will be periods
when market conditions will be
favourable for IPOs. In this climate,


IPOs by quarter

European capital markets saw a poor The year ended with a disappointing Q4 2010 that raised €10,115m. London
first quarter of 2011 with deal values fourth quarter as volatility continued to dominated activity in Q4 2011 raising
plummeting by 71% from €10,115m in destabilise the already fragile markets. €800m, 92% of total European IPO
Q4 2010 to €2,960m in Q1 2011. The The last quarter of 2011 saw 78 IPOs value, with the IPO of Polymetal
number of IPOs also fell by 26% from raising only €866m, a 40% decrease in (€421m) accounting for 49% of the
129 listings in Q4 2010 to 95 in Q1 2011 transaction volume and an 91% drop in quarter’s IPO proceeds across all the
with London hosting the lion’s share of offering values compared to 129 IPOs in European exchanges.
deals in the first quarter. Throughout the
early 2011 market conditions remained
fragile with growing uncertainty as a Figure 3: Volume of IPOs
result of political and economic unrest in
a number of countries leading to the
postponements of a number of large 140
floats such as BILT Paper and Topaz
Energy and Marine. 120

The markets continued to endure the 100
fallout in the second quarter from
Number of IPOs

heightened concerns over Greece, Spain 80
and Portugal. However, despite the
increasing turbulence in the capital 60
markets, European exchanges hosted
136 listings raising €13,295m in Q2 2011 40
compared to 89 listings raising €9,014m
in Q2 2010. Companies in the Basic 20

Resources, Mining and Oil and Gas 77 89 85 129 95 136 121 78
sectors dominated the European IPO 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
market in Q2 2011 with the IPOs of 2010 2011
Glencore, the commodities trader, and
Vallares, the oil and gas venture, raising
a total of €8,049m, accounting for 61%
of the total quarterly proceeds. Figure 4: Offering value of IPOs

IPO activity in Q3 2011 compared
14,000
positively to the same quarter in the
prior year with 121 companies raising
12,000
€9,370m versus 85 IPOs in Q3 2010
raising €2,479m. Of the money raised in
10,000
Q3 2011, €7,416m was generated from

four IPOs: €5,038m came from the July
8,000
privatisations of government-owned
assets in Spain and Poland and €2,378m
6,000
from the IPO of Dia, the Iberian discount
supermarket retailer. The later part of
4,000
Q3 2011 was significantly affected by
increasing economic uncertainties in the
2,000
European markets as was evidenced by
the postponement of the Spanish 4,678 9,014 2,479 10,115 2,960 13,295 9,370 866

national lottery IPO in September 2011. 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2011


Major IPOs

The total money raised by the top ten Of note is that 2011 featured a number of Following the London float of Vallar in
IPOs increased by €5,194m, or 41% from banking IPOs in the top ten for the first 2010, a special purpose acquisition
€12,816m in 2010 to €18,010m in 2011. time since 2007 (VTB Bank in London) company set up by Nathanial Rothschild
The contribution of the top ten to total and 2008 (Commercial Bank of Qatar in to fund mining acquisitions, two further
money raised in Europe rose from 49% London). Two of these IPOs, Bankia and investment companies successfully
in 2010 to 68% in 2011, reaching similar Banca Cívica, were hosted in Spain in Q3 floated in 2011. They were Justice
levels to those achieved in 2009 (72%). 2011 and relate to the privatisation of Holdings, the cash shell set up by Nicolas
Spanish government holdings. Berggruen (the backer of hedge fund,
The London listing of Glencore, the GLG, and Pearl Insurance) and Martin
world's largest commodities trading The retail sector was boosted by the Franklin; and Vallares, the cash shell
company, raised 38% of the top ten’s €2,378m raised by Dia, the Iberian founded by former BP CEO, Tony
contribution to value. The Glencore discount supermarket group, which has a Hayward, and Nathaniel Rothschild
listing was the largest IPO in Europe strong presence in emerging markets. targeting oil and gas acquisitions in
since Electricité de France raised €7bn emerging markets.
on the Euronext exchange in 2005.

Ten largest IPOs: 2011 (ranked by money raised)
Company Money raised €m Exchange Sector Country of origin
Glencore 6,867 London Basic Resources Switzerland
Bankia 3,092 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 1,063 London Investment Company UK
Banca Cívica 600 BME Banks Spain
OJSC Phosagro 530 London Chemicals Russia
Nomos Bank 497 London Banks Russia
Aker Drilling 455 Oslo Oil & Gas Norway
Total 18,010

Ten largest IPOs: 2010 (ranked by money raised)
Enel Green Power 2,264 Italy and Spain Utilities Italy
PZU 1,990 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 1,026 Warsaw Utilities Poland
Vallar 822 London Investment Company Channel Islands
Mail.Ru Group 669 London Media Russia
Kabel Deutschland Holding 660 Deutsche Börse Telecommunications Germany
Total 12,816


Major EU-regulated and
exchange-regulated markets

EU-regulated markets were dominated by a few large
deals while the number of IPOs on exchange-regulated
markets soared

EU-regulated London’s market share by offering Oslo Børs, NASDAQ OMX, NYSE
value in Europe increased from 40% Euronext and the SIX Swiss Exchange
Despite a 9% fall in the volume of in 2010 to 53% in 2011, although its all experienced drops in volume and
transactions, EU-regulated markets market share by volume fell from 30% value from 2010 to 2011. These four
saw a 5% increase in value raised in to 24%. This was largely due to a rise exchanges raised a combined total of
2011. Conversely exchange-regulated in low value transactions on Warsaw’s €4,876m from 39 transactions in 2010
markets experienced an increased NewConnect market. whereas 27 deals raised a mere €882m
volume of transactions (24%) but
in 2011. This was a drop of 31% by
raised less money (33%). These trends The Spanish Stock Exchange displayed volume and 82% by value.
differed to those of 2010, where EU- the largest increase in activity relative
and exchange-regulated markets both to 2010, with the value of IPOs more The Deutsche Börse, Borsa Italiana
faced overwhelmingly positive uplifts than tripling from €1,562m in 2010 to Main and Wiener Börse saw their
in volumes and values from €6,083m in 2011. The top two Spanish combined number of transactions
2009’s figures. IPOs, together worth €5,470m, raised increase by 50% from a low base of 12
90% of the Spanish proceeds in 2011. in 2010 to 18 in 2011, though the
EU-regulated markets hosted 118 IPOs
These were Dia, the Iberian retailer money raised fell 48% from €4,396m
raising €24,695m in 2011. This
and Bankia, which was formed as a to €2,305m.
accounted for 27% of total IPOs in
2011 and 93% of the total result of the union of seven Spanish Exchange-regulated
money raised. financial institutions. It is notable
that Bankia raised funds in response Exchange-regulated markets hosted
The top two European markets, to new government rules on bank 312 IPOs raising €1,796m in 2011.
London’s Main market and BME capital levels following the global This was a 24% rise in volume but a
(Spanish Stock Exchange) were the financial crisis. 33% fall in value compared to 2010
only EU-regulated exchanges raising when 250 transactions completed
more money in 2011 than in 2010. The Warsaw Stock Exchange ranked raising €2,696m. Exchange-regulated
London again led the European capital third by IPO value, with 31 IPOs markets accounted for 72% of total
markets in terms of value, with 101 raising €2,067m, although the IPOs and 7% of total offering value in
IPOs raising €14,104m, reaffirming its exchange saw a 45% drop in money 2011.
place as the leading European market raised year on year, while the number
London’s AIM market topped the table
and a key international financial of transactions rose by 19%.
for money raised with 60 transactions
centre. The amount raised in London (only two more than in 2010) raising
increased by €3,585m (or 34%) in Warsaw benefited from the €1,346m
€516m, 56% less than last year’s total
2011, though activity was buoyed by raised by the privatisation of the
of €1,180m. AIM contributed 29% of
the €6,867m listing of Glencore in May state-controlled Polish coking coal
the money raised in exchange-
2011 contributing 49% of the value company, Jastrzębska Spółka
regulated markets in 2011, down from
raised in London. Węglowa, which was the fourth largest
44% in 2010.
IPO of 2011.


The top three AIM IPOs were all oil 2011 and its money raised more than Nimrod Air Two, an investment
and gas exploration companies. tripled from €40m to €133m. The Irish company, raised €154m on London
Trapoil, the largest AIM IPO of the Stock Exchange hosted no SFM; and Catcher Technology Co and
year raising €69m, focuses on transactions in 2010 and only one in Neo Solar Power, both suppliers of
exploration on the UK Continental 2011, Continental Farmers Group, industrial goods and services, raised a
Shelf, Bayfield, which raised €61m, worth €17m (a dual listing with combined total of €246m on
focuses on exploration in Trinidad and London AIM). Luxembourg MTF.
Tobago and 3Legs Resources, which NYSE Euronext Alternext saw a 10%
Luxembourg EuroMTF, London SFM,
raised €56m, focuses on exploration in fall in volumes year on year, from 21 to
Deutsche Börse Entry Standard, BME
Poland and Germany. 19 transactions, but a 52% rise in value
(Spanish Stock Exchange) MAB and
Oslo Axess, WSE NewConnect and the Borsa Italiana AIM all experienced a from €73m to €111m. €43m of this
Irish Stock Exchange all experienced decline in both the number of IPOs money was raised by the IPO of Tekka
growth in both the number of they hosted and the amount of money Group, the French healthcare provider.
transactions they hosted and the they raised. In 2010, 69 transactions In contrast, NASDAQ OMX First North
amount of money raised. Oslo’s nine raised €1,298m whereas in 2011 these saw a 89% rise in volumes – from 9 to
IPOs raised €264m, although 93% figures had dropped by 49% and 41% 17 – but an 82% fall in values from
(€245m) related to the IPO of Sevan respectively to 35 transactions raising €22m to €4m.
Drilling, a deepwater drilling €768m. Three transactions accounted
company. NewConnect’s IPO volumes for €400m, or 52%, of the total money
doubled from 86 in 2010 to 172 in raised across the five exchanges: Doric

Major EU-regulated and exchange-regulated markets
2011 2010
Stock exchange Company IPOs Offering value (€m) Company IPOs Offering value (€m)
EU-regulated
London (Main) 1 39 13,371 52 9,034
1
BME (Spanish Stock Exchange) 4 6,070 2 1,514
WSE (Main) 31 2,067 26 3,770
Deutsche Börse 13 1,445 10 2,297
Oslo Børs 4 551 9 2,362
1
Borsa Italiana (Main) 3 494 2 2,099
Wiener Börse 2 366 – –
NASDAQ OMX (Main) 13 288 15 2,007
NYSE Euronext (Euronext) 8 43 11 344
SIX Swiss Exchange 2 – 4 163
EU-regulated sub-total 1
118 24,695 130 23,590
Exchange-regulated
London (AIM) 1 60 516 58 1,180
Luxembourg (EuroMTF) 20 451 36 797
Oslo Axess 9 264 7 83
London (SFM) 2 217 4 305
WSE (NewConnect) 2 172 133 86 40
NYSE Euronext (Alternext) 19 111 21 73
Deutsche Börse (Entry Standard) 5 78 13 116
Ireland (ESM) 1 1 17 – –
BME (Spanish Stock Exchange) MAB 5 13 10 48
Borsa Italiana (AIM) 3 9 6 32
NASDAQ OMX (First North) 17 4 9 22
Exchange-regulated sub-total 1
312 1,796 250 2,696
Europe total 1, 2 430 26,491 380 26,286

1. IPOs 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 2010 raising €2,264m.
2. Cumulatively the WSE NewConnect raised €148m in 2011 and €51m in 2010. 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.


Other markets

Quarterly IPO Watch Europe survey Germany
tracks the volume and value of IPOs
2011 2010
across all the main European exchanges.
However certain junior markets are not Offering Offering
Stock exchange IPOs value (€m) IPOs value (€m)
included within the Quarterly IPO Watch
Deutsche Börse
Europe survey. This section discusses the
EU-regulated markets:
nature and activity of those markets.
Prime Standard 12 1,445 8 2,297
General Standard 1 – 2 –
First Quotation Board
Deutsche Börse
First Quotation Board is the Deutsche exchange-regulated markets:
Börse’s junior market and, along with Entry Standard 5 78 13 116
Entry Standard, comprises the exchange- First Quotation Board (FQB) 199 35 151 50
regulated platforms of Deutsche Börse. It Germany total 217 1,558 174 2,463
is primarily aimed at qualified investors.

The First Quotation Board was the London
European junior market with the highest 2011 2010
volume of IPOs in 2011. However, the
Offering Offering
exchange was the only junior market Stock exchange IPOs value (€m) IPOs value (€m)
featured in our survey to see a drop in
Main Market 39 13,371 52 9,034
money raised from €50m in 2010 to €35m
AIM 60 516 58 1,180
in 2011.
London (SFM) 2 217 4 305
Deutsche Börse announced at the beginning PLUS 21 7 20 5
of 2012 that First Quotation Board will be London total 122 14,111 134 10,524
discontinued in its current form at some
point in the second half of 2012.
NYSE Euronext
PLUS 2011 2010
Offering Offering
PLUS is a small and mid-cap stock Stock exchange IPOs value (€m) IPOs value (€m)
exchange in London. PLUS operates two
Alternext 19 111 21 73
primary markets (the PLUS-listed and
Euronext 8 43 11 344
PLUS-quoted markets) as well as a
Marché Libre 14 3 27 1
secondary trading market (PLUS-
traded). In 2011, the PLUS exchange NYSE Euronext total 41 157 59 418
hosted 21 IPOs raising €7m, an increase
of 5% by volume and 40% by value The Marché Libre
compared to 2010.
The Marché Libre is an exchange- Marché Libre hosted 14 IPOs in 2011,
regulated market operated by NYSE raising a total of €3m. IPO volume
Euronext. It addresses small and dropped 48%, from 27 IPOs in 2010,
medium-sized firms seeking a public though money raised tripled from €1m
listing without facing the levels of to €3m.
regulation associated with NYSE
Euronext senior markets.


International IPOs

International IPOs covers the listings of Figure 5: Volume of international IPOs by country of origin
companies with substantial operations
outside the European countries covered
by this survey.

IPOs of international companies in
Europe showed a sharp decline in 2011 in India
19%
the absence of any real “blockbuster”
China
listings. The money raised by companies 34%
USA
with operations outside Europe
decreased by 48% from €8,714m in 2010 12% Russia
to €4,597m in 2011. However, the volume Ukraine
of international IPOs remained relatively South Africa
stable with 96 transactions in 2011 and 12%
Other
6%
100 in 2010.
7%
10%
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 IPOs in 2011.

PhosAgro, the global phosphate-based Figure 6: Value of international IPOs by country of origin
fertilizer producer, was the leading
international IPO in 2011, raising €530m
on the London Main market in July 2011.
The IPO of Nomos Bank, a fast growing 7%
3%
Russian bank, raised €497m. Both 4% Russia
achieved a place in the top ten European
4%
IPOs in 2011. Polymetal International Taiwan

PLC, the precious metals producer in 5% Tanzania
Russia and gold producer in Kazakhstan, 5% Brazil
59%
was the only significant IPO in Q4 2011. India
It raised €421m, just missing out on a 6%
China
place in the top ten European IPOs for
Ukraine
2011. 7%

UAE
Consistent with historical trends, India Other
was the prime source of international
IPOs measured on volume, mainly
through GDR offerings in Luxembourg.
However, these listings only accounted
for 5% of international offering value.

Top five international IPOs
OJSC PhosAgro 530 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 2,217


Figure 7: Volume of international IPOs by sector The oil and gas sector generated the
highest volume and highest value of
international IPOs in 2011 with 20% of
volume and 22% of value raised. The
mining sector, together with industrial
goods and services, was the joint second
16% 20% Oil & Gas
largest sectors by volume, each
4% Industrial Goods & Services contributing 18% of international IPOs.
4%
Mining The majority of the international oil and
Food & Beverage gas and mining sector listings were
5% 18% hosted on either the London Main or AIM
Basic Resources
6%
markets, consolidating London’s position
Technology
as a hub for companies operating in these
Personal & Household Goods sectors. However, consistent with
9%
18%
Utilities previous years, there was a spread of
Other international IPOs among the different
industry sectors.

London remained the primary market for
international IPOs in Europe, accounting
for 79% of all international funds and
56% of IPO volume. In 2011, 54
international transactions raised
Figure 8: Value of international IPOs by sector €3,658m, a 36% fall from 2010's figure of
€5,713m. International IPOs accounted
for 26% of money raised in London in
2011, compared with 54% in 2010.
2% 5%
4% Oil & Gas
22% Industrial Goods & Services
7%
Real Estate

Chemicals
11%
Mining
14%
Banks

11% Food & Beverage

Investment Company
12% 12%
Personal & Household Goods
Other


Picture
here


Value of equity trading

Figure 11: Value of equity trading 2011
Total trading (2011)

4%

€8,755bn
8%
London Stock Exchange Group
8% 31% NYSE Euronext

Deutsche Börse

13%
BME (Spanish Exchanges)

SIX Swiss Exchange

OMX
20% Other
16%

Figure 12: Value of equity trading 2010

4%
8%
Total trading (2010) London Stock Exchange Group
8% 29% NYSE Euronext

Deutsche Börse
€6,654bn 14%
BME (Spanish Exchanges)

SIX Swiss Exchange

OMX

Other
16% 21%

Source: World Federation of Exchanges
Note: London Stock Exchange Group comprises the London Stock Exchange and Borsa Italiana

Equity trading saw a recovery in 2011 Although Ireland had one of the lowest
with the trading values rising by 32% equity trading values, it experienced
from €6,654bn in 2010 to €8,755bn in the largest growth – almost tripling in
2011. Three quarters of the European value from €7,280m in 2010 to €18,980m
exchanges saw a rise in the value of their in 2011.
equity trading. Three exchanges saw a drop in trading
The top five stock exchanges accounted volumes with Athens experiencing a 51%
for 88% of all equity traded in Europe in drop in its equity trading, Luxembourg
2011, broadly in line with 2010. falling 44% and the Wiener Börse
London maintained its position as the decreasing by 13%.
leading market with trading values The relative proportions of the total equity
increasing by 37% from €1,949bn in 2010 traded across the larger European
to €2,665bn in 2011. exchanges such as the London Stock
Trading on NYSE Euronext increased by Exchange Group and NYSE Euronext
28% reaching €1,776bn in 2011 remained broadly consistent with last
compared to €1,388bn in 2010. Equity year’s performance.
trading on Deutsche Borse also grew by
32% reaching €1,431bn in 2011 from
€1,088bn in 2010.

IPOs by sector

Natural Resources IPOs, comprising The IPOs of Vallares and Justice The number of listings in the Technology
companies operating in the Basic Holdings in London raised €2,245m, sector increased by 29% from 35 IPOs in
Resources, Mining and Oil & Gas sectors, 59% of the total proceeds raised by the 2010 to 45 in 2011, although money
dominated IPO money raising in Investment Companies sector in 2011. raised dropped significantly from
Europe during 2011. Some 39% The Investment Companies sector €1,750m in 2010 to €210m in 2011.
of proceeds were represented by Natural reached third place for both IPO value Consistent with 2010, the majority of
Resources companies, raising €10,404m and IPO volume in 2011, though total IPOs in this sector were hosted on the
compared to €1,591m in 2010. volume was 31% down on 2010’s figure Warsaw Stock Exchange, with 25 IPOs
of 48 IPOs. The London Stock Exchange raising €8m, followed by the London
The largest IPO of the year, Glencore, led the activity in the sector with 23 out Stock Exchange hosting 7 IPOs, raising
accounted for 26% of total proceeds of the 33 Investment Company IPOs in €46m. Technology company IPOs on
raised in Europe in 2011 and 99.5% of 2011. The average amount of proceeds average raised €4.7m.
the value raised by the Basic Resources raised by Investment Companies in 2011
sector, driving this sector to take the top was €114m. The Oil & Gas sector experienced a
spot by value raised. There were a total significant increase in activity and
of 11 IPOs of companies in the Basic The Industrial Goods & Services sector moved up to seventh positions in the
Resources sector in 2011, six of which retained its top position by IPO volume rankings, with 32 IPOs in 2011
took place on the London Stock for the fifth consecutive year. The sector compared to 15 in 2010. Europe’s tenth
Exchange. Average value of proceeds hosted 89 IPOs out of the total 430 largest IPO was the Oil & Gas company,
raised by Basic Resources companies in across all the European exchanges in Aker Drilling, on the Oslo Stock
2011 was €627m. 2011, a 41% increase in the number of Exchange, which raised €455m. The
deals from 2010. Total money raised in sector raised €1,649m in 2011 compared
The IPOs of Bankia and Banca Cívica in this sector of €1,630m remained with €331m in 2010.
Spain in July 2011 raised a combined relatively flat in 2011 compared to
€3,692m, propelling the Banking sector €1,689m raised in 2010. The majority of The largest shift in the ranking was
to second spot with total IPO proceeds floats in this sector (62%) were hosted on witnessed by the Health Care sector,
reaching €4,452m compared to only €5m the Warsaw Stock Exchange with an which moved from 17th place in 2010
in 2010. There were a total of eight deals average transaction value of less than to seventh in 2011. The sector hosted
in the Banking sector in 2011 compared €1m, cumulatively raising €73m. London 21 IPOs in 2011 compared to only five
to only two in 2010. BME, London Stock and Luxembourg exchanges each hosted in 2010, driven by 11 IPOs on
Exchange and Warsaw Stock Exchange nine floats raising €394m and €331m, NewConnect and seven IPOs on OMX.
each hosted two IPOs with the respectively. The majority of these However, the total value raised by the
remaining two deals hosted on companies (72%) had their main sector fell by 67% from €284m in 2010
Luxembourg Stock Exchange and OMX. operations outside Europe. to €94m in 2011.
The average deal value in the Banking
sector was €556m.


IPOs by sector – by value raised
Value raised (€m) Value raised (€m)
Sector 2011 2010
Basic Resources 6,900 31
Banks 4,452 5
Investment Companies 3,792 4,110
Retail 2,513 1,629
Mining 1,855 1,229
Oil & Gas 1,649 331
Industrial Goods & Services 1,630 1,689
Real Estate 975 220
Chemicals 530 474
Personal & Household Goods 463 1,422
Food & Beverage 354 682
Financial Services 319 885
Technology 210 1,750
Pharmaceuticals & Biotech 176 736
Automobiles & Parts 157 1
Media 137 1,117
Travel & Leisure 102 458
Health Care 94 284
Utilities 64 4,925
Construction & Materials 61 74
Telecommunications 54 722
Insurance 4 3,512
Total 26,491 26,286

IPOs by sector – by volume
Company IPOs Company IPOs
Sector 2011 2010
Industrial Goods & Services 89 63
Technology 45 35
Investment Companies 33 48
Oil & Gas 32 15
Financial Services 25 22
Personal & Household Goods 21 14
Health Care 21 5
Mining 20 23
Pharmaceuticals & Biotech 18 27
Travel & Leisure 16 8
Food & Beverage 15 19
Construction & Materials 13 11
Media 12 18
Real Estate 12 16
Utilities 11 15
Basic Resources 11 4
Automobiles & Parts 11 1
Retail 8 17
Banks 8 2
Telecommunications 6 10
Insurance 2 4
Chemicals 1 3
Total 430 380


Developments in regulation
and markets
Prospectus Directive minimum 25% free float in order to be have been made to criminalise the
amendment index included even though the FSA will offences of insider dealing and market
admit, by exception, companies to manipulation across the EU.
The amended Prospectus Directive premium listing with a lower percentage
should take effect on 1 July 2012. It free float. Consideration is also being Both of these proposals now proceed to
introduces proportionate disclosure given to using the index rules to impose the next step in the European legislative
regimes for rights issues, small and governance standards, though proposals process, engaging with the Member
medium-sized companies and companies have yet to be published. States and the European Parliament.
with reduced market capitalisation. However, formal adoption is still some
During 2011, the European Securities Transparency Directive review time in the future.
and Markets Authority made
recommendations to the European Initially in response to concerns from Market developments
Commission on the detailed measures to smaller listed companies, the European
2011 saw the respective failed mergers
be adopted for implementation. These Commission has brought forward
of the London and Toronto Stock
included the proposal that proposals to reduce the burden of
Exchanges and of the Singapore and
proportionate, i.e. less, disclosure should ongoing disclosure for all companies
Australian Stock Exchanges. In
not be available on an IPO or initial traded on regulated markets. Examples
addition, the merger plans of NYSE
admission to trading on a regulated such as abolishing the requirement for
Euronext and Deutsche Börse were
market. This regime should reduce the an interim management statement, or
blocked by the European Commission at
cost of further issues of capital to quarterly report, have been tabled but
the beginning of 2012.
listed companies. legislation to introduce these changes is
still some way off.
Developments in London
Market Abuse Directive review
The conditions for the inclusion of an
issuer in the stock market indices is an In 2011 the European Commission
area that has been receiving particular brought forward proposals for Market
attention in the UK. The FTSE index Abuse Regulation that would extend the
committee previously changed the rules scope of the existing framework covering
to require non-UK incorporated insider dealing and market
companies to have a 50% free float, as manipulation. The regulation would
well as acknowledgement of adherence cover any financial instrument traded on
to UK market practices, in order to a multilateral trading facility (MTF) or
secure inclusion in the UK series of on an organised trading facility to avoid
indices. This would thus gain them entry any regulatory arbitrage between
to the FTSE 100, for example. FTSE have trading venues. In addition, proposals
now introduced rules to require UK
incorporated companies to have a


Global perspective

2011 2010
Offering Offering
Region IPOs value (€m) IPOs value (€m)
Greater China 1, 2 420 57,240 492 98,624
Europe 430 26,491 380 26,286
US 134 25,581 168 29,064
Latin America 21 6,153 22 5,727
Singapore 23 5,350 30 3,533
Japan1 36 1,495 22 7,796
Australia 105 1,195 98 6,441
Gulf Cooperation Council 1 9 567 12 1,531

1. The offering value of IPOs 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 IPOs.

In 2011 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 2011 global IPO activity lost some of The US dropped to third spot despite a
the momentum from 2010. The stormy strong final quarter, with values falling
economic conditions were sufficiently by 12% and volumes decreasing by 20%
far-reaching to create an impact in all in 2011 compared with 2010, although
international markets. Europe was the 2010 benefited from the €11.9bn raised
only region to experience growth (13% by General Motors.
and 1% respectively) for both volume
and value. Japan experienced an 81% decline in
money raised from €7,796m in 2010 to
Greater China maintained its position as €1,495m in 2011 following the impact of
the top region by value, despite a 42% the earthquake in March 2011.
fall in the money raised from €98,624m
in 2010 to €57,240m in 2011. It hosted In contrast, Singapore saw a 51%
420 IPOs compared with Europe’s 430, increase in money raised from €3,533m
thereby demonstrating a much larger in 2010 to €5,350m in 2011 despite a
average transaction value of €137m in 23% fall in IPO volumes.
comparison to Europe’s €77m.

IPO activity in Greater China

Hong Kong maintained its position as the Kennedy Liu, Partner, PwC Hong Figure 14:
largest capital market in Greater China Kong: IPO volume and offering value 1, 2
during 2011 in terms of IPO funds
"Global companies and luxury brands are
raised. However, the total funds raised
increasingly looking to expand in the Asia 600 100,000
from Hong Kong IPOs in 2011 was
Pacific region, especially China. To do so,
€25.1bn, 43% less than in 2010. The
these companies need additional funds.
number of IPOs totalled 90, down 13% 500
And where better to tap the market for 80,000
compared to the prior year.
capital than Asia. Listing in the region is
also a good way for these international 400

The Greater China IPO market was

Number of IPOs
60,000
affected by external factors in 2011. The companies to enhance their brand and
volatility in the global equity markets image in markets where they're not as well 300

dragged indices in Greater China down known. The uniqueness of Hong Kong's
40,000
by as much as 20% throughout the year position makes the city an ideal platform 200
with a consequential negative impact on for these global companies to meet with
the price/earnings ratios of IPOs. investors from China." 20,000
100

Despite the reduction in IPO volumes
and funds raised in 2011, the Hong Kong 0
2009 2010 2011
0
IPO market is still expected to be vibrant Offering value Number of IPOs
due to sufficient liquidity and the
continuous growth of China’s economy.
1. The offering value of IPOs in Greater China includes
over-allotment or greenshoe amounts.
In Mainland China total IPO volumes 2. Companies from Greater China are able to list a
were also reduced. However domestic different class of shares on the different Greater China
exchanges. In these cases, the data above includes
small and medium sized enterprises the value of shares listed on each exchange and the
listings as separate IPOs.
remained the main driving force in the
IPO market. A total of €11.7bn was
raised through IPOs in Shanghai, a
decline of 45% compared to 2010. While
a total of €20.1bn was raised on the
Shenzhen Stock Exchange, a reduction
Comparison with Greater China
of 40% from 2010.
2011 2010
Offering Offering
Europe total 430 26,491 380 26,286
Hong Kong 1 90 25,053 104 43,618
Shenzhen 243 20,118 321 33,318
Shanghai 39 11,678 28 21,069
Taiwan 48 391 39 619
Greater China total 420 57,240 492 98,624
1. The number of IPOs on Hong Kong Stock Exchange excludes transfers from GEM to Main Board.


IPO activity in the US

While the US IPO markets had strong IPOs were well diversified across Figure 15:
momentum in the first half of the year industries with Technology leading the IPO volume and offering value
and a resurgence of activity in the fourth way with 21% of total proceeds, followed
350 50,000
quarter, the markets saw an overall closely by Energy (17%), Healthcare and
decrease in activity in 2011. However, Business Services (14% each), Financial
300
there are some positive signs regarding Services (13%) and Consumer Products
40,000
equity markets as we head into 2012. (11%).
250
A total of 134 IPOs generated €25,581m

Henri Leveque, Partner, PwC US:

Number of IPOs
30,000
compared to 168 IPOs raising €29,064m “The US IPO market reflects a tale of two 200
in 2010, representing a 20% decrease in halves in 2011. On the back end of a solid
volume and a 12% decrease in value recovery towards the end of 2010, the year 150
20,000
when compared to 2010. However, the kicked off with robust IPO activity
2010 proceeds were skewed by the throughout the first half. Although 100
second largest US IPO in history – the activity was slow for the majority of the 10,000
General Motors (GM) float that raised second half, a few noticeable market 50
€11,567m. windows opened in the fourth quarter,
0 2007 0
contributing to the year ending on a 2008 2009 2010 2011
Despite the decline in volume and value
stronger note. This renewed confidence in Offering value Number of IPOs
of offerings, average deal size increased
the US IPO market, combined with the
by 10% from €173m in 2010 to €191m in
strong pipeline of offerings provides a
2011. The US IPO market witnessed the
positive outlook for the IPO markets in
return of some larger deals in 2011, with
2012.”
a total of three IPOs in excess of €1bn,
compared to 2010 which only produced
the GM IPO.

Investment company sponsors-backed
IPOs, which encompass deals backed by
private-equity and venture capital firms,
continued to lead the market activity
Comparison with the US
with 87 of the 134 IPOs (65%) raising
€19,967m (78%), compared to 128 deals 2011 2010
(76%) raising €13,293m (46%) in 2010. Offering Offering
Although completed IPOs declined, Europe total 430 26,491 380 26,286
interest in the IPO market was strong
NYSE 68 18,505 87 22,940
with 274 companies filing initial
Nasdaq 66 7,076 81 6,124
registration statements in 2011. Of these
US total 134 25,581 168 29,064
offerings, 171 remained in the IPO
pipeline at the end of 2011, marking the
largest IPO pipeline in several years.


IPO activity in Japan

2011 saw a 60% increase in IPO volume Takahiro Nakazawa, Partner, Figure 16:
in Japan, with the number of IPOs PwC Japan: IPO volume and offering value 1
increasing from 22 in 2010 to 36. “Markets are facing a lot of uncertainties
However, this compares with around heading into 2012, such as the strength of 40 8,000
150 IPOs each year between 2000 and the Japanese Yen, the sovereign debt crisis
2007, highlighting that the market is yet in Europe, and elections in the US, Russia, 35 7,000
to fully recover. etc. The development and interaction of
30 6,000
these factors will significantly affect the
Money raised by the 36 IPOs in 2011 was

capital markets landscape in 2012. It is

Number of IPOs
€1,495m, 81% down on the €7,796m 25 5,000
consequently very difficult to anticipate
raised by 22 IPOs in 2010. Therefore,
how many IPOs will take place in Japan 20 4,000
although the number of IPOs in 2011
this year.
was greater than 2010, the average IPO 15 3,000
size was much smaller. However, given the circumstances, many
Japanese market players expect that the 10 2,000
Nearly one third of the 2011 IPOs were
number of IPOs will grow and there will be
in the Information and Communication 5 1,000
around 50 IPOs in 2012.”
Technology (ICT) sector, and this trend
is expected to continue into 2012. 0
2009 2010 2011
0

Offering value Number of IPOs

1. The offering value of IPOs in Japan includes
over-allotment or greenshoe amounts.

Comparison with Japan
2011 2010
Offering Offering
Europe total 430 26,491 380 26,286
Tokyo Stock Exchange (Main) 9 1,070 6 7,522
JASDAQ 16 244 10 134
Mothers 11 181 6 140
Japan total 36 1,495 22 7,796


IPO activity in the Gulf
Cooperation Council
In 2011, the number and total value Steve Drake, Partner, Figure 17:
raised through IPOs in the six nation PwC Middle East: IPO volume and offering value
Gulf Corporation Council (GCC) reduced “Regional IPO activity during the year has
to nine IPOs with a total value of €567m been difficult with both issuers and 12 1,600
compared to 12 IPOs with a total value of investors exhibiting caution regarding the
€1,531m in the previous year, a 25% right time and conditions to return to the 1,400
10
decrease in activity and 63% decrease market. As we are moving into 2012, we
in value. 1,200
are seeing improvements in confidence on
8

the supply side and so would expect to see

Number of IPOs
The year witnessed three IPOs in the 1,000
increased activity in certain regional
United Arab Emirates, all in the first half
markets during 2012. We see a number of 6 800
of 2011 and one IPO in Oman in Q4.
issuers beginning to prepare themselves
Although the Kingdom of Saudi Arabia 600
for an IPO so that when the time is right,
continued to outperform other GCC 4
they are ready to act quickly.”
countries in the number and value of 400
IPOs, with five floats during the year, it 2
still underperformed compared to the 200
previous year, with a decrease of 44% in
the number of IPOs and a 65% decrease 0 0
2009 2010 2011
in the total value raised. Offering value Number of IPOs

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 Comparison with the Gulf Cooperation Council
coupled with issuer reluctance to sell at 2011 2010
perceived lower valuations contributed to
Offering Offering
a slow and stifled year in the equity Stock exchange IPOs value (€m) IPOs value (€m)
markets. Until the situation begins to Europe total 430 26,491 380 26,286
improve we would expect investor equity
Saudi Arabia 5 331 9 942
confidence in the region to remain low.
UAE 3 190 – –
Oman 1 46 1 205
Bahrain – – 1 358
Qatar – – 1 26
GCC total 9 567 12 1,531


IPO activity in Latin America

The combined markets of the Latin Ivan Clark, Partner, PwC Brazil: Figure 18:
American region saw a 7% increase in “2011 started promisingly enough on IPO volume and offering value
IPO value with €6,153m raised in 2011, Latin American capital markets but soon
compared to €5,727m in 2010. The 25 10,000
felt the impact of the Eurozone crisis and
number of transactions decreased from sovereign credit rating downgrades. The 9,000
22 in 2010 to 21 in 2011, a 5% fall. region’s generally healthy fast emerging 20 8,000
economies could not decouple from the
Like 2010, 2011’s activity was 7,000
global capital markets. In Argentina, the

concentrated in Brazil. In 2010 it

Number of IPOs
nationalisation of the pension funds three 15 6,000
accounted for 75% of value raised
years ago put a dampener on the market
though in 2011 this had decreased to 5,000
which has yet to lift.”
49%. The Colombia Stock Exchange saw 10 4,000
its value increase tenfold from €204m in “Prospects though are brighter. The 3,000
2010 to €2,043m in 2011. Brazilian market, in particular, has a
significant number of IPOs in the pipeline 5 2,000
The number of IPOs on the Santiago
and offshore funds are waiting for the 1,000
Stock Exchange quadrupled with a near
green light. As Brazil takes up its position
proportionate increase in money raised 0 0
as the world’s sixth largest economy, its 2009 2010 2011
as well, moving from one transaction Offering value Number of IPOs
funding needs surpass the Brazilian
raising €161m in 2010 to four IPOs
Development Bank´s capacity to meet all
raising €732m in 2011. In contrast,
its capital requirements. The funds will
Mexico saw a decline of 67% and 66%
need to be drawn from deeper wells. As
respectively in both IPO volumes and
such, the international capital markets
values year on year.
will play an ever increasing role in
The market was held back in 2010 in partnering with Latin American countries
anticipation of the expected Petrobras as they emerge onto the world stage.”
deal. When it did finally come in
September, market concerns were
focused on issues in Europe which
further delayed new Brazilian deals. Comparison with Latin America
2011 2010
Offering Offering
Europe total 430 26,491 380 26,286
Brazilian 11 3,034 11 4,284
Colombia 4 2,043 2 204
Santiago 4 732 1 161
Mexican 2 344 6 1,017
Buenos Aires – – 2 61
Latin America total 21 6,153 22 5,727


IPO Watch Europe 2011

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