The European IPO market has hit a five year low following the last quarter of 2008 says UK consultancy PricewaterhouseCoopers (PwC).
The firm’s IPO Watch Europe records a 96% fall in money raised from new issues – from €29bn in Q4 of 2007 to €1.2bn in Q4 2008.
The number of new listings fell by 73%, from 233 in the final three months of 2007 to just 64. This is the lowest level of IPO activity since 2003 when investor confidence was hit by the impending invasion of Iraq. The total offering value of all European IPOs in the fourth quarter of 2008 represented only 30% of the single largest IPO value in the same quarter of 2007.
The two largest two IPOs accounted for 97% of the total money raised during the quarter, leaving just €32m raised by the remaining 62, reflecting the fact that very few admissions were accompanied by offerings.
Resolution Limited, a Guernsey incorporated special purpose acquisition company (SPAC), was the largest IPO of the quarter, raising €660m on London’s Main Market. The Warsaw Stock Exchange was home to Europe’s second largest, with Polish energy company Enea raising €546.
The largest IPO of the quarter was that of the Guernsey incorporated special purpose acquisition company, Resolution Limited, raising €660m on London’s Main Market, followed by the Polish energy company Enea which raised €546m on the Main Market of the Warsaw Stock Exchange (WSE). Another indicator of the reduced level of IPO activity was the fact that the total offering value of all European IPOs in the fourth quarter of 2008 represented only 30% of the single largest IPO value in the same quarter of 2007.
The final quarter capped a poor year for IPOs, where just 338 companies took the plunge, compared to 813 in 2007, with total offering down 82%, from €80.4bn to €14.2bn.
Tom Troubridge, head of the capital markets group at PwC, said: “We do not expect any sign of recovery therefore until at least the fourth quarter of this year and even then we would expect that those investors who decide to dip their toes in the water will first want to test the temperature with domestic IPOs, investing in businesses they know best. International IPOs, which have become a strong feature of London and some other markets in the past, are only likely to come back when investors feel more confident about putting their money into higher risk investments.”