IPO market to continue growing, bankers predict

5 January 2011

The number of Initial Public Offerings (IPOs) listed on US exchanges is expected to grow during 2011, investment bankers have claimed as part of a new report.

A study by accountancy firm BDO USA showed that almost three-quarters of capital market professionals at leading financial service providers believe that IPO activity will rise this year.

Nearly a quarter of this figure described the increase as ‘substantial’ while nine per cent of those questioned said they expect a decline in the amount of activity surrounding IPOs.

The report showed that 87 per cent of bankers questioned predicted an increase in the amount of IPOs taking place in the technology sector.

Jay Duke, a partner in the Capital Markets Practice of BDO USA, said: “With the number of IPOs on US exchanges more than doubling in 2010, it isn’t surprising that investment bankers are forecasting more measured growth in the number of deals for 2011.”

“However, when you consider that the General Motors offering, by itself, accounted for more than 40 per cent of all US IPO proceeds in 2010, the projected growth in volume reveals a growing confidence in the capital markets community.”

Further findings from the report showed that the energy and biotech industries were seen by bankers as other high-growth areas for IPOs.

By Jim Ottewil

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