Bankers responsible for floating companies and selling new shares into the market will enjoy a well-earned rest this Christmas after their busiest year since 2007, having notched up business worth almost $865 billion in the last 12 months.
Firms flocked to issue shares in 2014 and private equity firms seized the opportunity to sell out of investments, cashing in on renewed confidence in the stock market and investors’ hunger for yields at a time of rock-bottom interest rates.
Even with jitters that unsettled some European sales in the autumn, market debuts globally rose almost 50 percent, according to Thomson Reuters data published on Tuesday.
Tuesday’s data showed the U.S. market was among the most successful for new issues, thanks in part to the record-breaking listing of Chinese online retailer Alibaba in September, the largest to date.
U.S. stock market debuts rose almost 57 percent year-on-year to hit levels not seen since 2000, with $92.4 billion raised in the year to Dec. 15.
Initial public offerings worldwide totalled $237 billion.
After the bumper Alibaba sale, Saudi Arabia led the listings with National Commercial Bank’s $6 billion share sale, the year’s second-biggest IPO by amount raised, ahead of Australia’s Medibank Private at $4.9 billion.
Europe was the most active market overall, with equity issuance of more than $262 billion this year, against $250 billion in the United States.
“(Europe, Middle East and Africa) has been more active than the U.S., which is a pretty extraordinary statistic,” said Craig Coben, co-head of Global Equity Capital Markets (ECM) at BoA Merrill Lynch.
Among the banks, Goldman Sachs maintained its dominance of ECM league tables with 395 deals raising $76.3 billion — despite market share falling to 8.8 percent from 11.5 percent last year.
Goldman was followed by rivals Morgan Stanley and JP Morgan.
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The financial industry accounted for a fifth of global equity capital markets (ECM) issuance this year, as banks sought to meet tougher capital requirements, but after a year heavy with financial offerings and IPOs, bankers said they saw investors hungry for more diverse offerings in 2015.
This includes share sales linked to acquisitions.
French cable operator Numericable raised 4.7 billion euros in a November rights issue to help finance its takeover of Vivendi’s SFR mobile network division, attracting a high take-up of 99.95 percent.
“Corporates seem to have very healthy pipelines of M&A projects,” said Albert Ganyushin, head of International Listings for Euronext. “I think we will see spinoffs take a much bigger piece of the fundraising pie next year.”
Upcoming sales include German drugmaker Bayer’s plastics business, potentially worth around 10 billion euros, and Fiat’s listing of luxury Italian sportscar maker Ferrari.
But after ups and downs in 2014, it is unlikely to be plain sailing in 2015, as investors eye potential eurozone disinflation, geopolitical turmoil and the falling oil prices.
Industry bankers also questioned how keen U.S. investors remained for global deals as their own economy shows signs of recovery. BoA Merrill Lynch said U.S. investors underpinned many offerings abroad this year, accounting for over 50 percent of demand in some deals.
“I think the greatest focus will be here in the U.S. market, where the economy has stabilized,” said Jeff Bunzel, Head of ECM for the Americas at Deutsche Bank.
Asia-Pacific, meanwhile, saw activity surge this year, with Australian IPOs reaching an all-time record, and activity in the key markets of Hong Kong and China spurred on after Chinese regulators resumed approving new listings in the country.
Equity issuance rose 29.1 percent to $242.8 billion in Asia-Pacific, the most since 2010. IPO volumes more than doubled to $91.4 billion, helped by Alibaba’s mammoth offering.
More is expected there and elsewhere in Asia, with Indian bankers forecasting a pickup in privatizations as Prime Minister Narendra Modi’s government looks to clean up state-run firms and to raise cash.
“It’s a robust pipeline of relatively large deals (globally), in the billion-plus range, spread across industries, which is good news,” said Jerome Leleu, co-head of Asia-Pacific ECM at Morgan Stanley, which topped global IPO league tables this year.
“Overall, we could see 2015 being at least as good as 2014.”