The firm's Global IPO update report noted that numbers of deals were set to rise by over a quarter in Q2 203 compared to the previous quarter, with 195 deals expected, compared to 156 in Q12 2013. In terms of deal size, Ernst & Young said values would almost double, with deals expected $46.4bn compared to $24.3bn over the same period.
Maria Pinelli, Ernst & Young’s global vice-chair of strategic growth markets said rising equity markets and “a wave of recent mega-deals” had acted as an “ice-breaker” on the market, paving the way for further IPOs.
“Combined with improved global monetary policy, market confidence is growing, particularly in the US, Japan, UK and parts of Latin America. These factors combined with a strong registration pipeline, suggesting a strong second half for the year.
“However, 89% of IPOs priced with or above filing range in Q2 2013, hence management team should remain cautious as pricing remains a critical concern for investors.”
Ernst & Young said US IPOs accounted for a third of global activity in Q2, raising $12bn from 48 deals (32% of global activity by deal number and 35% by value).
European markets saw 27 IPOs, raising just $2bn – or 6% of global capital in Q2 2013, while activity in Asia continued to be impacted by the lack of IPO activity on China exchanges , which have been closed to new listings since November 2012. In the wider Asia region, 44 deals raised $10.5bn – or 31% of capital raised.
Pinelli added: “We are seeing an increase of IPO activity on Hong Kong and Japanese exchanges, as well as from emerging markets such as Thailand, Singapore, Malaysia and – to an extent – Indonesia, due to more positive sentiment.
“When China reopens their IPO market, a high volume of companies sitting in the pipeline will create positive momentum and sentiment positioning Asia favorably globally.”