IPO Watch Europe - Q4 2005

January 2006

The latest IPO Watch Europe survey shows the highest level of activity this year has taken place in the final quarter. The survey, which tracks the volume and value of IPOs on Europe's main stock exchanges, lists 208 IPOs in quarter four compared with the 155 recorded in the same period of 2004 and 128 in quarter three of 2005.

The total offering value of IPOs was a record €25,269m in the fourth quarter of 2005, almost three times as much as the €8,639m recorded in the fourth quarter of 2004 and €8,487m in the third quarter of 2005. The high offering value was driven to some extent by Europe's largest IPO for many years - Electricité de France - a French privatisation which raised €7,000m on Euronext. It also helped to maintain Euronext's position as the largest market in terms of offering value this quarter.

In terms of the number of transactions, London continued to dominate Europe, with a combined market share for the main market, AIM and PSM of 50% of all European IPOs. However, London's market share was down from 73% in the same period last year. Although AIM continued to drive activity, accounting for 82% of total London IPOs and 41% of all European IPOs in the quarter, the 17 main market IPOs still made up 65% of London's total offering value.

The largest IPO in London was by Kazakhmys, the Kazak copper mining conglomerate which raised €971m and accounted for 18% of the total money raised on London's main market. In total, 33 non-European IPOs chose to list on the London markets. In addition to the success of London in attracting IPOs from other countries, Luxembourg also attracted 11 Indian GDRs to its EuroMTF market.

In contrast to the success of European IPOs, the US markets have seen a continued decline in both the offering value and the number of IPOs compared to this period last year. For the third quarter running, the total offering value on the US exchanges was lower than that raised on the European markets. However, the average offering value in the US has increased from €119m in the previous quarter and €101m in quarter four of 2004 to €139m this quarter.

In conclusion, the year 2005 as a whole was the strongest for several years for European IPO activity. In volume terms there were 602 IPOs in total, significantly up from 420 in 2004 and 143 in 2003. The total offering value almost doubled to €50,294m in 2005 compared with €27,288m in 2004. Furthermore European markets have raised far more money than the €27,484m raised by the US exchanges in 2005.