Morgan Stan is top in global IPO rankings
MORGAN Stanley has topped the underwriting league for initial public offerings (IPOs) in the first half of the year.
A few large deals helped propel the Wall Street bank to first place, up from its number three spot at this time last year.
It underwrote 36 deals with estimated proceeds of $5.9bn (£3.9bn) in the first six months, more than eight times what it hauled in from the deals a year earlier, according to Thomson Reuters data.
The bank had a joint-bookrunning role on the second largest IPO of the year, South Korea’s $4.41bn Samsung Life. It also worked on IPOs of Poland’s top insurance group PZU, Spain’s travel reservations firm Amadeus IT Holding and Brazilian shipbuilding and oil services company OSX Brasil.
JPMorgan, the former number one, was in second place with 40 deals totalling $5.65bn. Goldman Sachs slipped one spot to third place, on 31 deals totalling $5.1 bn.
Much of the IPO activity in the first half came from Asia, accounting for six of the ten largest deals.
Japan’s $11.16bn Dai-ichi Life Insurance and South Korea’s $4.41bn Samsung Life Insurance were the largest IPOs.
Fears that Europe’s debt crisis could spread have increased market volatility and weighed on new issues, scaring some investors away from smaller, less liquid flotations. Many IPOs were pulled during the quarter due to these fears. Large offerings, however, were able to plod along.
While IPO league table status does not track how the stocks perform in the aftermarket, they give bragging rights to the banks and bankers involved and show which banks are doing good business.
China, whose stocks are among the worst performers globally so far in 2010, took three of the top 10 global spots as IPO underwriters. That excludes the July IPO of the Agricultural Bank of China, which aims to raise up to $24.5bn including overallotments, making it the largest IPO ever if it hits that target.
Among the Chinese deals were Huatai Securities, fetching $2.3bn and China First Heavy Industries, the mainland’s biggest heavy equipment maker, raising $1.7bn.
“We are in a slow recovery. The question is how slow or fast is it? The market got ahead of itself because the recovery was slower than many expected it to be. The European contagion remains a concern,” said Frank Maturo, co-head of equity capital markets for the Americas at Bank of America Merrill Lynch.
Deutsche Bank’s Hantho agreed. “I think we are going to be pretty much in the same state of affairs as we are now (in the second half). These macro concerns aren’t going to recede quickly,” he said.
JPMorgan, the former No. 1, was in second place with 40 deals totaling $5.65 billion. Goldman Sachs slipped one spot to third place, on 31 deals totalling $5.1 billion.
Proceeds from new issues in the first half of 2010 have increased more than sevenfold from a year earlier, but are still significantly less than pre-crisis, 2007 levels — and the value of withdrawn deals in the second quarter was the second-highest in the last three years.
BIG DEALS
Bankers say amid the uncertainty investors may find big deals more attractive.
One of these is China’s AgBank, while another is AIG’s Asian insurer, AIA, which banking sources in the region believe will revive its more than $10 billion IPO plan from earlier this year.
In the U.S., government-owned General Motors is moving forward with an initial public offering that could raise up to $20 billion, according to sources familiar with the deal.
The U.S. Treasury, which owns a majority stake in the automaker, has said the offering could happen as soon as the fourth quarter.
“The opportunity to buy large cap companies opens up large pools of capital that you don’t usually associate with the U.S. IPO market. There are funds that can only invest in larger capital companies. Those pools of capital are much larger than those dedicated to small and midcap companies,” said Credit Suisse head of equity capital markets for the Americas Jeff Bunzel.
Also in the U.S. pipeline are Dutch company NXP Semiconductors, hospital operator HCA Inc and U.S. retailer Toys R Us and Nielsen Holdings.