Wall Street this year has had its best year for initial public offerings (IPOs) since 2000, thanks to the record-setting flotation of Chinese Internet giant Alibaba Group Holding Ltd (阿里巴巴) and a barrage of biotech deals.
Activity was “uninterrupted” and proved largely immune to forces that at times rattled equity markets, Renaissance Capital said in a report last week.
“While various global events, such as Russia’s incursion into the Ukraine and conflicts in the Middle East, caused nervousness in global markets, they largely failed to disrupt the US IPO applecart,” Renaissance said.
Renaissance said there were 273 stock debuts this year, up 23 percent from last year.
Dealogic released similar numbers, counting 291 offerings, up 27 percent from last year.
Analysts are gearing up for another heady year next year, citing a deep pipeline of securities filings from leading prospects and investor zeal for hot names such as apartment rental Web site Airbnb Inc and app-based taxi service Uber Technology Inc.
New entrants to US equity markets raised US$85 billion this year, according to Renaissance, about 55 percent more than last year.
“What is behind the growth is that companies are really growing and need more capital to continue to accelerate their growth,” NASDAQ chief executive officer Bob Greifeld said on CNBC. “That is great for the overall economy.”
The year 2000 remains the best on record for IPOs, with 406 offerings raising US$96 billion, Renaissance said.
Paradoxically, while the US and China spar for the distinction of the world’s biggest economy, the Chinese Internet marketplace Alibaba emerged as a key player behind New York’s banner year.
In September, Alibaba became the biggest IPO in history, raising US$22 billion.
Besides Alibaba, nine other companies raised more than US$1 billion this year. They included Citizens Financial Group Inc, a unit of British bank Royal Bank of Scotland, with US$3 billion gained and Synchrony Financial, which was spun out of General Electric Co, with US$2.9 billion.
A big chunk of this year’s IPOs came out of the health sector, with biotechs comprising 25 percent of total deal volume at 69 offerings, Renaissance said.
Biotech offerings also accounted for eight of the top 10 IPOs in terms of return to shareholders.
However, the health sector was also responsible for five of the 10 worst-performing new stocks.
In all, the average new stock finished 16 percent higher at the end of the year compared with its IPO price. That was well below the 40.8 percent gain last year.
Renaissance cited the sell-off in energy IPOs in the latter part of the year as oil prices tanked, as well as a correction in high-multiple tech stocks in March and April, for the year-over-year decline.
Twice as many deals were postponed this year compared with last year and 40 percent came to market below the proposed pricing range, the report said.
Experts expect another strong year next year, owing to a heavy number of securities filings from companies disclosing plans to create offerings. Renaissance has a private company “watch list” of 255 companies that could go public.
More than 80 percent are in the tech sector. The list includes Web registration company GoDaddy and subscription-based music streaming service Spotify Ltd.
“Overall positive returns and a large pipeline suggest that consistent deal flow should continue into 2015, tempered by disciplined pricing,” Renaissance said.
“While IPOs in 2015 will have to grapple with a [US] Fed ready to raise interest rates, a depressed energy sector and concerns over economic growth abroad, the US IPO market proved its resiliency this year, and has the potential to create another post-2000 record,” Renaissance said.
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