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IPO Watch Europe

Review of the year

2008

Contents

IPO Watch Europe – Review of the year 2008

Foreword 1

European IPOs by quarter 3

IPOs by Stock Exchange 4

EU-Regulated and Exchange-Regulated Markets 7

International IPOs 9

Major IPOs in 2008 11

IPOs in the last five years 12

Where is the liquidity in Europe? 13

Where is the value in Europe? 14

What does the future hold for the European Exchanges? 15

IPOs by sector 16

Other European Markets 19

Comparison with the US 20

Comparison with Greater China 22

Comparison with Japan 23

Comparison with the Middle East 24

Developments in European Capital Markets Regulation 25

About IPO Watch Europe 26

About the Capital Markets Group in London 27

1 IPO Watch Europe – Review of the year 2008

Foreword

IPO activity across theEuropean exchanges, andworldwide, has suffered adismal year due to the loss ofconfidence in the capitalmarkets and the globaleconomic crisis. The Europeanmarkets have seen aproportionately larger decline inthe money raised comparedwith both the US and GreaterChina, resulting in Europe beingoutperformed by both thesemarkets for the first time since2003. London has continued tobe the most successfulEuropean market in 2008 withan increased market share byoffering value of 64%, despite asignificant fall in the volume andvalue of IPO activity.

Activity on the European exchanges fellby 59% in 2008 to 337 IPOs comparedwith 819 in 2007, while the total offeringvalue of IPOs fell dramatically by 83%from m80,473m in 2007 to justm13,957m in 2008. This trend has alsobeen seen in the volume and value ofinternational IPOs (non-Europeancompanies listing on the Europeancapital markets), which have seenrespective decreases of 38% and 72%,to 81 IPOs by non-European issuersraising a total of m6,018m in 2008.

In 2008 only three of the top ten largestIPOs raised over m1bn, whereas in2007 each of the top ten largest IPOsraised over m1bn. The total moneyraised by the top ten IPOs dropped by65% from m22,883m in 2007 tom8,076m in 2008. Two of the top fiveIPOs in 2008 were internationalofferings on Londonʼs Main Market:Fresnillo and Global Investment House.Fresnillo, a Mexican based preciousmetals mining company, was the thirdlargest IPO of the year in Europe, andraised m1,143m. Global InvestmentHouse, a Kuwaiti financial servicescompany, was the fourth largest IPOthis year and raised m735m.

We have continued to see the Londonmarkets lead the European exchangesin 2008. London continued to attract themajority of international offerings, with55% of the 81 international IPOs in2008, including four out of the fivelargest international IPOs this year.However, total money raised on theLondon markets in 2008 was justm8,884m, representing a 77% fall onmoney raised in 2007. Also, there were99 IPOs in London in 2008, a fall of69% from 2007. The reduced level ofmoney raised and activity was feltacross both AIM and Londonʼs MainMarket.

Despite a large fall in IPO activity onthe US exchanges during 2008, for thefirst time in three years the USexchanges outperformed the Europeanexchanges in terms of the total amountof new money raised. This was largelydue to the NYSE hosting the largestIPO in US history, that of Visa, whichtook place during the first quarter of2008 and raised m11,510m ($17,864m).Visa accounted for 60% of them19,092m raised by the 57 IPOsacross the US exchanges during theyear. The US capital marketscontinued to be more domesticallyfocused than those in Europe, withinternational IPOs accounting for just6% of the money raised in the UScompared to 43% of the money raisedin Europe and 56% of the money raisedin London.

The Greater China markets also saw asignificant decline in IPO activity in2008 with the total offering value ofIPOs falling by 79% from m76,333m tom16,041m and the volume of IPOsdecreasing from 240 in 2007 to 157 in2008.

For the first time this year, the IPOWatch Europe survey also discussesthe IPO activity in the Middle East.This analysis, together with that of theUS and Greater China markets,illustrates that the effects of the currentcrisis in the financial markets are beingfelt throughout the world, with theMiddle East being the least affected ofthose areas considered.

IPO Watch Europe – Review of the year 2008 2

During 2009, we intend to consult withthe exchanges across Europeregarding the content and presentationof the IPO Watch Europe survey andwe may, as a result, amend the scopeof the survey to take account of anychanges such as the introduction ofnew markets or the development orsegmentation of existing markets.

Developments in EU capital marketsregulation this year have been focusedon GAAP equivalence, and ongoingdevelopments will mainly consist of finetuning of the existing regulations.NYSE Euronext has introduced a “FastPath Listing” procedure which allowsthe use of SEC filings by non-EUissuers. In London, the FSA isconsulting on amendments to theListing Rules which would result inthere being “Standard” and “Premium”listings, and has reduced the minimumsubscription period for a rights issue.

The current unstable market conditions

make it extremely difficult to predict, withany confidence, when the IPO market islikely to start showing signs of recovery.The majority of capital raisings in 2009are almost certainly going to bedominated by secondary offerings ascompanies look to rebuild their balancesheets and seek financing from theirexisting investors through rights issues.

Our research has shown that the equitymarkets historically lead the businesscycle by four to six months and, givenrecent IMF forecasts, most marketcommentators do not expect equityprices to recover until late 2009 at theearliest and possibly not until 2010. IPO volumes follow the equity markets,but because the IPO process itself takeson average between four and sixmonths, IPO volumes are likely to lagbehind the initial recovery of equityprices, which suggests a recovery in theIPO market towards the end of the firsthalf of 2010.

Tom Troubridge, Head of the CapitalMarkets Group in London

900

800

700

600

500

400

300

200

100

02004 2005

Volume of IPOs

2006 2007 2008

433

598

Num

ber o

f IPO

s

166 119

700

50287

672

Investment companiesIPOs excluding investment companies

100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

02004 2005

Offering Value (mm)

2006 2007 2008

27,679

51,617

Offe

ring

Valu

e (m

m)

Investment companiesIPOs excluding investment companies

65,736 64,377

16,096

9,929

4,028

22,113


European IPOs by quarter

IPO activity on the Europeanexchanges has suffered during 2008due to the increasing loss of investorconfidence and the global economiccrisis. Total activity in Europe byvolume was down by 59% in 2008,which saw 337 IPOs compared to 819IPOs in 2007, and total offering valuefell by a massive 83% from m80,473min 2007 to m13,957m in 2008.

The established quarterly trend is for asurge in activity in the second and finalquarters of the year as IPOs arecompleted before the summer and theend of the year. While this trend heldtrue for the second quarter of 2008, theEuropean equity markets suffered aparticularly dismal fourth quarter whichrecorded the lowest IPO activity sincethe first quarter of 2003, and which hasbeen the worst fourth quarter in termsof IPO activity since 2002, when marketconfidence was weakened by theuncertainty surrounding events in theMiddle East.

300

250

200

150

100

50

0Q1

183

235

Q2 Q32007 2008

Q4 Q1 Q2 Q3 Q4

Volume of IPOs

133

646872

259

142

Num

ber o

f IPO

s

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0Q1

10,667

1,942

Offe

ring

valu

e (m

m)

Q2 Q32007 2008

Q4 Q1 Q2 Q3 Q4

Offering value of IPOs (mm)

9,171

12,624

1,2381,606

29,18228,000

The year-on-year activity, both in termsof value and volume of IPOs, wasmarkedly lower across all quarters of2008 when compared to prior year, withthe fourth quarter experiencing thelargest falls in IPO activity.

There was also a large fall in theaverage offering value1, which fell by52% from m115m in 2007 to m55m in2008, and the combined value of thetop ten IPOs fell by 65% compared to2007.

1 The average offering value has been calculated based on the total offering value over the number of IPOs raising money.


IPOs by Stock Exchange

Europe hosted 337 IPOs in 2008, a 59%decrease from the 819 in 2007. The totaloffering value plummeted by 83%, fromm80,473m in 2007 to m13,957m in 2008.

London continues to lead the Europeancapital markets by number of IPOs andoffering value, with 99 IPOs raisingm8,884m in 2008, compared to 324IPOs raising m39,087m in 2007.Londonʼs market share by offering valueincreased from 49% in 2007 to 64% in2008 although its market share byvolume fell from 40% to 29%. This trendwas shown by the fact that London

Stock Exchange Company Offering value Company Offering value IPOs 2008 (mm) 2008 IPOs 2007 (mm) 2007

London 99 (1,2) 8,884 (1,2) 324 (4,6,7,8,9,10,11,12) 39,087 (4,6,7,8,9,10,11,12)

WSE 91 (2) 2,502 (2) 104 (5) 2,021 (5)

NYSE Euronext 65 2,501 127 8,032

Deutsche Börse 12 330 62 6,984

BME (Spanish Exchanges) 1 292 12 10,084

Luxembourg 19 (1) 285 (1) 19 1,401

OMX 26 208 85 3,138

SIX Swiss Exchange 6 (3) 169 (3) 10 1,975

Borsa Italiana 6 129 29 3,943

Oslo Børs & Axess 14 65 37 1,993

ISE 1 (3) - (3) 10 (4,6,7,8,9,10,11,12) 1,678 (4,6,7,8,9,10,11,12)

Wiener Börse - - 6 (5) 1,427 (5)

Athens Stock Exchange - - 3 479

Europe Total 337 13,957 819 80,473

Note: IPOs by market are shown gross of multiple listings; however these are netted off in the total number and offering values.

(1) Enegi Oil dual listed on London (AIM) and Luxembourg (BdL) raising m18m. (2) New World Resources listed on London (Main Market), WSE (Main Market) and the Prague Stock Exchange

raising m1,390m.(3) Aryzta dual listed on the ISE (Main Market) and SIX Swiss Exchange with no money raised.(4) Total Produce dual listed on London (AIM) and ISE (IEX) with no money raised.(5) Warimpex dual listed on WSE and Wiener Börse raising m99m.(6) Boundary Capital dual listed on London (AIM) and ISE (IEX) raising m25m.(7) Origin Enterprises dual listed on London (AIM) and ISE (IEX) raising m100m.(8) Smurfit Kappa dual listed on London (Main) and ISE raising m1,495m.(9) Zamano dual listed on London (AIM) and ISE (IEX) with no money raised.

(10) First Derivatives dual listed on London (AIM) and ISE (IEX) with no money raised.(11) Andor Technology dual listed on London (AIM) and ISE (IEX) with no money raised.(12) Trinity Venture Capital Holdings dual listed on London (AIM) and ISE (IEX) raising m50m.

hosted seven of the top ten IPOs byoffering value in 2008 including thesecond and third largest IPOs of theyear: New World Resources andFresnillo. New World Resources, aCzech Republic based mining company,triple listed on the Main Market inLondon, the Main Market of the WarsawStock Exchange (WSE) and on thePrague Stock Exchange raisedm1,390m across all three markets.Fresnillo, a Mexican precious metalsmining company, listed on the MainMarket in London raised m1,143m.Both companies listed in May 2008.

Martin Graham, Director of EquityMarkets, London Stock Exchange:

“There can be little doubt that thesecond half of 2008 produced some ofthe most difficult market conditionsmany of us can remember, impactinginvestor confidence and the number ofnew companies joining markets acrossthe globe. However, during the year theLondon Stock Exchange continued tooutperform the world’s other majorexchanges in attracting internationalIPOs. In 2008, as well as welcomingcompanies from Asia, Russia and otherCIS countries, where we have beenvery active historically, we alsoextended our global reach, with Fresnillobecoming the first Mexican firm to joinour markets, illustrative of theExchange’s growing influence in LatinAmerica.

Looking ahead, we see a strongpipeline of issuers preparing forflotation, waiting for market conditionsto improve, and believe that the fundraising opportunities that we provideand the depth of liquidity in our marketswill continue to make the London StockExchange the listing venue of choicefor ambitious international companies.”

The Warsaw Stock Exchange (WSE)was the second largest European marketin terms of number of IPOs and offeringvalue with 91 IPOs raising m2,502m in2008 compared with 2007 when ithosted 104 IPOs raising m2,021m. TheWSEʼs market share of European IPOsby volume increased from 13% in 2007to 27% in 2008. The 24% increase inthe offering value in 2008 is primarily dueto it co-hosting the second largest IPO ofthe year with the triple listing of NewWorld Resources raising m1,390m inMay 2008. It also hosted another of thetop ten IPOs by offering value of 2008with the IPO of Enea, the Polish energycompany which raised m546m.

Ludwik Sobolewski, President,Warsaw Stock Exchange:

“In the very harsh conditions of 2008WSE maintained a relatively highnumber of new companies debuting onthe main floor, and an impressivenumber of new companies enteringNewConnect, an alternative platform.It shows a steady interest on the side ofdomestic companies to go public, tostrengthen their transparency and publicaccountability, and to create a newsource of capital. The number of newlistings on the main market and onNewConnect amounted to one of thebiggest joint value of IPOs in Europe.The fact that the IPO market has beenalive, fighting the repercussions of theglobal crisis, has greatly contributed toWSE becoming in 2008 the largeststock exchange in Central-Eastern andSouth-Eastern Europe in 2008 in termsof market capitalisation.”

NYSE Euronext has remained the thirdlargest European market in terms ofnumber of IPOs and offering value with65 IPOs raising m2,501m in 2008. This,however represents a significantdecrease of 69% in the amount raisedon NYSE Euronext in 2007 and a 49%decrease in activity in the same period.NYSE Euronext hosted the largest IPO

of the year by EDP Renováveis, aPortuguese renewable energy companywhich raised m1,566m in June 2008. Italso hosted another of the top ten IPOsof 2008 by offering value with the raisingof m600m by Liberty InternationalAcquisition Company, an investmentcompany.

Martine Charbonnier, ExecutiveDirector European Listings, NYSEEuronext:

“Despite tough market conditions in2008, NYSE Euronext’s Europeanmarkets attracted several large IPOs,including the successful IPO of EDPRenováveis on Euronext Lisbon, whichraised m1,566m, the largest IPO inEurope in 2008. Alternext, our specialistmarket for small and mid-sizedcompanies, attracted a growing numberof international listings, including the firstUS company to ever list on Alternextand, for the first time, four companiesfrom China. This reflects the major effortwe are making to attract internationalcompanies from fast-growing countrieslike China onto our markets and helpthem grow further.”

The Deutsche Börse saw an 81%decrease in the volume of IPOs from 62in 2007 to 12 in 2008. The offering valueof m330m represents a dramaticdecrease of 95% from the m6,984mraised in 2007. Its market share byoffering value also decreased from 9% in2007 to 2% in 2008. The largest IPO onthe Deutsche Börse was SMA SolarTechnology which raised m315m.

The BME (Spanish Exchanges) rankedfifth by offering value of IPOs in 2008,falling three places from second in 2007.The BME only hosted one IPO raisingm292m in 2008 compared with 12 IPOsraising m10,084m in 2007. Together withthe decrease in activity, this significantdecrease in offering value was due to theBME having the second and third largestEuropean IPOs by value in 2007:

Iberdrola Renovables, a renewableenergy company, which raised m4,070m,and Criteria Caixa Corporation, aninvestment company, that raisedm3,452m.

Domingo J Garcia, Head of ResearchDepartment, BME (SpanishExchanges):

“The corporate activity of companies inSpain in 2008 has reflected the difficultcondition of the world’s financial markets,resulting in a sharp drop in IPOscompared to the previous year in whichSpain ranked the second largestEuropean exchange by offering value.The only IPO of 2008 was indeed anhistoric one; being the first SpanishSavings Bank to list.”

The Luxembourg exchange saw aconsistent number of IPOs with 19 in both2007 and 2008, however the offeringvalue decreased by 80% from m1,401m in2007 to m285m in 2008. Of the 19 IPOsin 2008, 15 were by overseas companiesoffering Global Depositary Receipts(GDRs), 13 of which were by Indiancompanies, which demonstrates thatLuxembourg remains the market of choicefor Indian companies issuing GDRs inEurope. The largest IPO on Luxembourgwas a GDR offering by Anant RajIndustries, an Indian real estatedevelopment company.

Hubert Grignon Dumoulin, Head ofIssuers and Market Regulation,Luxembourg Stock Exchange:

“The IPO activity by volume on theLuxembourg Stock Exchange did not fallin 2008 compared to 2007 as theexchange attracted a consistent numberof 19 IPOs in both 2007 and 2008.Luxembourg was partially immune fromthe slowdown of activity until the lastquarter of the year. GDR activity hassignificantly decreased with only onelisting in the last quarter. The end of the year was significant forthe Luxembourg Stock Exchange with the listing of Reinet Investment SCA, an


IPOs by Stock Exchange

important spin off from the CompagnieFinancière de Richemont.”

Following its successful year in 2007,the Nordic exchange, OMX, hostedonly 26 IPOs which raised m208m in2008 compared to 85 IPOs whichraised m3,138m in 2007. The IPO ofthe Danish investment company,Formue Evolution, was the largest onOMX in the year, raising m122m.

The SIX Swiss Exchange (formally theSWX Swiss Exchange) was the eighthlargest European market in terms ofoffering value, hosting six IPOs in 2008which raised m169m compared to them1,975m raised from the ten IPOs itsaw in 2007. The largest IPO on thismarket during 2008 was OrascomDevelopment, which raised m117m.

Dr. Yvonne Gunsch-Wegmann, VicePresident and Head of Issuer andInvestor Relations, SIX SwissExchange:

“The rather conservative number ofinitial public offerings was no surpriseunder the current market conditions.The largest IPO this year on the SIXSwiss Exchange was that of the realestate development company,Orascom Development Holding Ltd,which while domiciled in Switzerland,has its origin and main operations inEgypt. Moreover, we set the groundfor a broader acquisition of cross-border IPOs with the inclusion offoreign domiciled companies in ourequity indices from May 2008. Thisshould help maintain our highlycompetitive position amongst themajor European exchanges in terms ofthe percentage of foreign companieslisted (based on statistics availablefrom the Federation of EuropeanSecurities Exchanges).”

Borsa Italiana has seen a dramaticdecrease both in the volume andoffering value of IPOs in 2008compared to 2007. It hosted six IPOs

which raised m129m compared with 29IPOs raising m3,943m in 2007.

Luca Peyrano, Head of ContinentalEurope – Primay Markets, BorsaItaliana:

“After five consecutive years of excellentresults, IPO activity slowed downsignificantly in 2008, one of the mostdifficult years in recent history.Nevertheless, the wide pool of ItalianSMEs, the largest in Europe, is a majorpotential for growth for our markets. Thelaunch of AIM Italia in December 2008recognises this potential, and representsa key milestone of the merger betweenBorsa Italiana and the London StockExchange. AIM Italia will be an essentialpart of Borsa Italiana’s offering for smalland medium sized companies.”

The Oslo exchanges, Børs and Axess,together hosted 14 IPOs raising m65min 2008. This again represents a sharpfall in the volume and offering value ofIPOs when compared to 2007 whichsaw m1,993m raised from 37 IPOs.

Inge A. Myhrvold, Vice President,Head of Issuer Sales, Oslo StockExchange:

“While 2007 represented a record yearfor the Norwegian market, Oslofollowed the international trend in 2008of fewer IPOs and less money beingraised. We experienced a solid run ofcompanies going public as we movedinto the summer, but the momentumceased in the second half of last year.However, our fully regulated market foryounger companies, Oslo Axess,continued its triumphant journey lastyear, and since it was launched in May2007 this market has captured 63% ofall new listings in Oslo. We are veryproud to facilitate such an efficientlisting vehicle for these exciting growthcompanies.”

The only IPO on the Main Market of theIrish Stock Exchange (ISE) was that of

the Swiss food producer, Aryzta, which duallisted on the ISE and the SIX SwissExchange, with no money raised.

Deirdre Somers, Chief Executive, IrishStock Exchange:

“This year has seen some of the mostchallenging IPO market conditions for sometime. Looking forward to 2009, theExchange will continue to ensure that theIrish market is structured to benefit from anyresurgence in the Irish economy and tofocus on promoting its IEX market to qualitygrowth companies which may beconsidering an IPO in the future. The IEXmarket has a proven track record inattracting companies seeking a wider baseof investors, euro denominated tradingfacilities and a streamlined admissionsregime which is complementary to the AIMmarket in London.”

The Austrian exchange, Wiener Börse, andthe Athens Stock Exchange had no IPOactivity in 2008.

Michael Buhl, CEO, Wiener Börse(Vienna Stock Exchange):

“2008 was a difficult year for allinternational financial markets. Afterseveral very prosperous years, all majormarket indicators declined in 2008 underthe influence of the financial crisis thatoriginated in the US sub-prime market. TheVienna Stock Exchange was not able todecouple from these turbulences.

Nevertheless, the Vienna Stock Exchangewas able to set positive signals in the pastyear that allow for an optimistic outlook. In2008, we built a strong axis with theacquisition of majority stakes in threeneighbouring stock exchanges – Budapest,Ljubljana and Prague. With thiscooperation we want to raise internationalawareness among institutional investors ofthis capital market region and increaseliquidity on the regional stock exchanges inthe future. In the last year we also extended our closecooperation with many stock exchanges inthe region, above all, Bucharest, Sarajevo


EU-Regulated and Exchange-Regulated Markets


Stock Exchange Company Offering value Company Offering value IPOs 2008 (mm) 2008 IPOs 2007 (mm) 2007

EU-RegulatedLondon (Main) 38 (2) 7,137 (2) 99 (8) 27,641 (8)

NYSE Euronext (Euronext) 16 2,466 40 7,563 WSE (Main) 30 (2) 2,455 (2) 80 (5) 1,980 (5)

Deutsche Börse 2 324 28 6,734 BME (Spanish Exchanges) 1 292 12 10,084 SIX Swiss Exchange 6 (3) 169 (3) 10 1,975 OMX (Main) 10 152 35 2,301 Borsa Italiana 6 129 29 3,943 Luxembourg 4 (1) 18 (1) 1 - Oslo Børs 4 2 18 1,264 ISE 1 (3) - (3) 1 (8) 1,495 (8)

Wiener Börse - - 6 (5) 1,427 (5)

Athens Stock Exchange - - 3 479

EU-regulated sub-total 115 11,736 360 65,292

Exchange-Regulated

London (AIM) 58 (1) 1,423 (1) 220 (4,6,7.9,10,11,12) 9,537 (4,6,7,9,10,11,12)

Luxembourg (EuroMTF) 15 267 18 1,401 London (PSM) 2 255 5 1,909 London (SFM) 1 69 - - Oslo Axess 10 63 19 729 OMX (First North) 16 56 50 837 WSE (NewConnect) 61 47 24 41 NYSE Euronext (Alternext) 7 31 39 445 Deutsche Börse (Entry Standard) 10 6 34 250 NYSE Euronext (Marché Libre) 42 4 48 24 ISE (IEX) - - 9 (4,6,7,9,10,11,12) 183 (4,6,7,9,10,11,12)

Exchange-regulated sub-total 222 2,221 459 15,181

Europe Total 337 13,957 819 80,473

Note: IPOs by market are shown gross of multiple listings; however these are netted off in the total number and offering values.

(1) Enegi Oil dual listed on London (AIM) and Luxembourg (BdL) raising m18m. (2) New World Resources listed on London (Main Market), WSE (Main Market) and the Prague Stock Exchange

raising m1,390m.(3) Aryzta dual listed on the ISE (Main Market) and SIX Swiss Exchange with no money raised.(4) Total Produce dual listed on London (AIM) and ISE (IEX) with no money raised.(5) Warimpex dual listed on WSE and Wiener Börse raising m99m.(6) Boundary Capital dual listed on London (AIM) and ISE (IEX) raising m25m.(7) Origin Enterprises dual listed on London (AIM) and ISE (IEX) raising m100m.(8) Smurfit Kappa dual listed on London (Main) and ISE raising m1,495m.(9) Zamano dual listed on London (AIM) and ISE (IEX) with no money raised.

(10) First Derivatives dual listed on London (AIM) and ISE (IEX) with no money raised.(11) Andor Technology dual listed on London (AIM) and ISE (IEX) with no money raised.(12) Trinity Venture Capital Holdings dual listed on London (AIM) and ISE (IEX) raising m50m.

EU-regulated markets hosted a total of115 IPOs raising m11,736m in 2008,representing a 68% decrease in thelevel of activity and a massive 82%decrease in offering value comparedwith 2007. In volume terms, LondonʼsMain Market was again the most activeand attracted 38 IPOs compared to the99 IPOs in 2007. The second mostactive EU-regulated market was theWSE with 30 IPOs, followed by NYSEEuronext (formerly Eurolist) with 16IPOs.

In terms of offering value, London againled the way, generating m7,137m whichrepresents 61% of total money raisedon the EU-regulated markets in 2008.NYSE Euronext raised m2,466m, thesecond largest amount raised by an EU-regulated market, largely due to NYSEEuronext hosting the largest IPO of theyear by EDP Renováveis, a Portugueserenewable energy company. The thirdlargest exchange by money raised wasthe Main Market of the WSE whichraised m2,455m, an increase of 24%from the m1,980m raised in 2007. Thiswas largely due to the second largestIPO of the year by New WorldResources, a Czech Republic basedmining company which triple listed onthe Main Market of the WSE, the MainMarket in London and the Prague StockExchange, raising m1,390m.

In 2008 BME raised m292m from oneIPO compared to the m10,084m raisedfrom its 12 IPOs in 2007. In 2007 BMEhosted the second and third largestEuropean IPOs by value.

Dramatic reductions in the amountsraised on EU-regulated markets wereseen on the Deutsche Börse, the SIXSwiss Exchange, the Main Market ofOMX, the Oslo Børs and the BorsaItaliana where the offering values fell by95%, 91%, 93%, 99% and 97%respectively from the amounts raised in2007, due to the decreased levels ofactivity.

The volume of IPOs on EuroMTFdecreased by 17% and the total offeringvalue was 81% down on 2007 at m267m.EuroMTF was the second largestEuropean exchange-regulated market byvalue in 2008.

Although Londonʼs PSM only hosted twoIPOs in 2008 it raised m255m, making itthe third largest exchange-regulatedmarket in terms of value for the year.Both IPOs were international listings, onea South Korean engineering companyand one a construction company fromPakistan. In 2007 the PSM hosted fiveIPOs and raised m1,909m, all of whichwere international listings.

Londonʼs Specialist Fund Market (SFM),a newly created market in 2008 anddedicated solely to the increasingnumber of specialist funds, attracted oneIPO raising m69m and this was sufficientto make it the fourth largest exchange-regulated market by value in the year.

Oslo Axess has seen ten IPOs in 2008raising m63m compared with 19 IPOsraising m729m in 2008. Since opening inMay 2007 Oslo Axess has attracted morelistings than Oslo Børs.

OMXʼs First North market ranked sixth byvalue in 2008 with 16 IPOs raising m56m,after being the fourth most activeexchange-regulated market by offeringvalue in 2007, its first full year of trading,when it hosted 50 IPOs that raisedm837m.

NYSE Euronextʼs Alternext saw a sharpdecrease in the volume and a sharperdecrease in offering value of IPOs in2008 compared with 2007. In 2008NYSE Euronextʼs Alternext saw sevenIPOs which raised m31m compared with39 IPOs raising m445m in 2007. MarchéLibre saw a small decrease in the volumeof IPOs from 48 in 2007 to 42 in 2008,however offering values on the exchangewere generally lower with total moneyraised in 2008 of m4m compared tom24m raised in 2007.


Looking at the exchange-regulatedmarkets overall, similar decreases wereexperienced and again it was value thatreduced most dramatically. In the year,222 IPOs raised a total of m2,221mcompared to 459 IPOs which raised atotal of m15,181m in 2007. Predictably,all European exchange-regulatedmarkets have been significantlyaffected by the volatility in the financialmarkets, and the total money raised fellby 85% compared to 2007.

The money raised on Londonʼs AIMmarket made up 64% of the total raisedon Europeʼs exchange-regulatedmarkets. However, AIMʼs market shareby volume has continued to decrease,accounting for 26% of all exchange-regulated IPOs in 2008 compared to48% in 2007, due to the success ofnewer exchange-regulated marketselsewhere, particularly the WSEʼsNewConnect.

AIMʼs 58 IPOs in 2008 represent a fallof 74% on the 220 IPOs experienced in2007, while the m1,423m offering valuein 2008 is 85% down on the m9,537mraised in 2007. The reduction in thevolume of IPOs hosted by AIM is largelydue to a combination of the loss inconfidence in the capital markets andvolatile market conditions.

The WSE NewConnect exchange wasthe most active exchange-regulatedmarket by volume with 61 IPOs whichraised m47m compared with 24 IPOsraising m41m in 2007. The WSENewConnect exchange opened inAugust 2007.

Luxembourg saw the majority of itsIPOs on its exchange-regulated market,EuroMTF. The EuroMTF hasdominated activity in Luxembourg sinceit opened in July 2005 and reflects theattractiveness of the exchange-regulated market to non-EU issuers.Luxembourg continues to beparticularly attractive to Indian GDRs.


NYSE Euronext hosted 16international IPOs, with six onEuronext and five each on Alternextand Marché Libre. LibertyInternational Acquisition Companywas the largest international IPO onNYSE Euronext in 2008 raisingm600m. Luxembourgʼs EuroMTF wasthe third most attractive destinationfor international IPOs with 13 IPOsfrom India and one from Argentina.

International IPOs

The global economic crisis has had asignificant impact on the number andvalue of international IPOs across theEuropean markets in 2008. Europeanexchanges attracted 81 IPOs by non-European issuers in 2008 comparedwith 131 in 2007, which represents a38% decrease in international IPOactivity. However, the decline inoffering value was nearly double that ofthe decline in volume, with the amountof money raised by international IPOsdecreasing by 72% from m21,537m in2007 to m6,018m in 2008.

London attracted 55% by volume of allinternational IPOs; AIM hosted 29international IPOs which raised m977mand Londonʼs Main Market saw 14international IPOs raising m3,785m in2008. The PSM saw two internationalIPOs raising m255m. Four out of thefive largest international IPOs in 2008were in London, with all four listing onthe Main Market. The largestinternational IPO, Fresnillo, whichraised m1,143m on Londonʼs MainMarket, was the third largest IPO of2008. It is notable that two of the topfive international IPOs were Kuwaiticompanies.

USA 9%Kazakhstan 4%

Volume of IPOs by country of origin

Russia 4%Canada 5%

Other 24%

British Virgin Islands 4%

India 21%

China 12%

Hong Kong 4%Kuwait 2%

Ukraine 2%

Egypt 2%

Mexico 1%

Cayman Islands 6%

Cayman Islands 17%

Egypt 5%India 6%

Ukraine 7%

USA 2%Kazakhstan 2%

Other 6%Pakistan 1%

South Korea 3%

Kuwait 18%

Qatar 7%

Russia 7%

Mexico 19%

Offering value by country of origin


The Deutsche Börse saw twointernational IPOs raising no money.Oslo Børs and Oslo Axess each hostedone international IPO. The SIX SwissExchange hosted one international IPO,an Egyptian real estate company whichraised m117m.

Companies from India represented 21%of the total volume of international IPOsin 2008, however due to a relatively lowaverage offering value they onlyaccounted for 6% of the total moneyraised.

Top five international IPOs

Company Money raised Exchange Sector Country of(mm) Origin

Fresnillo 1,143 London Mining Mexico

Global Investment House 735 London Financial Services Kuwait

Liberty International Acquisition Company 600 NYSE Euronext Investment Company Cayman Islands

Commercial Bank of Qatar 444 London Banks Qatar

Global Mena Financial Assets 318 London Investment Company Kuwait


Major IPOs in 2008

In 2008 only three of the top ten largestIPOs raised over m1bn, whereas in2007 each of the top ten largest IPOsraised over m1bn. The total moneyraised by the top ten IPOs dropped by65% from m22,883m in 2007 tom8,076m in 2008.

NYSE Euronext was notable forhaving the largest IPO of the year,EDP Renováveis. In 2007 NYSEEuronext hosted none of the top fiveEuropean IPOs, and only one of thetop ten. However in prior years,NYSE Euronext had hosted the

largest European IPO in 2004(Belgacom raising m3,290m); and in2005 (EDF raising m7,000m) and wouldhave continued that trend in 2006 whenNatixis raised m4,220m but for theRosneft IPO which raised m5,192m onLondonʼs Main Market.

Londonʼs Main Market was home toseven of the top ten IPOs in 2008compared to five in 2007, when it alsohosted the largest, VTB bank. It isinteresting to note in the currenteconomic climate that six of the top tenIPOs of the year are companies in thefinancial services, investment companyand bank sectors.

Ten largest IPOs (ranked by money raised)

2008


EDP Renováveis 1,566 NYSE Euronext Utilities PortugalNew World Resources 1,390 London/WSE/Prague Mining Czech RepublicFresnillo 1,143 London Mining MexicoGlobal Investment House 735 London Financial Services KuwaitBH Global 674 London Investment Company Channel IslandsResolution 660 London Investment Company Channel IslandsLiberty International Acquisition Company 600 NYSE Euronext Investment Company Cayman IslandsEnea 546 WSE Utilities PolandCommercial Bank of Qatar 444 London Banks QatarGlobal Mena Financial Assets 318 London Investment Company Kuwait

2007


VTB Bank 4,724 London Banks RussiaIberdrola Renovables 4,070 BME (Spanish Exchanges) Utilities SpainCriteria Caixa Corporation 3,452 BME (Spanish Exchanges) Investment Company SpainEurasian Natural Resources Corporation 1,888 London Mining KazakhstanTognum 1,800 Deutsche Börse Industrial Goods & Services GermanyNyrstar 1,739 NYSE Euronext Basic Resources BelgiumSmurfit Kappa 1,495 London/Ireland Industrial Goods & Services IrelandSports Direct International 1,384 London Retail UKStrabag 1,184 Wiener Börse Construction & Materials Austria3i Infrasture 1,147 London Investment Company Channel Islands


The graphs below show the level ofactivity on the largest and most activemarkets over the last five years,excluding investment companies.

All markets have seen dramaticdecreases in the volume and offeringvalue of IPOs in 2008 due to thevolatility in the financial markets, withLondon showing the sharpest falls.

Following the growth in 2004 and 2005,London experienced a fall in thenumber of IPOs in 2006, 2007 andagain in 2008. The offering value ofIPOs continued to increase stronglybetween 2004 and 2006 beforelevelling off in 2007 and then fallingsharply in 2008. The collapse in 2008follows a shift in the mix of IPOs inLondon between 2004 and 2007 whenIPO activity for larger companies on theMain Market remained relatively strong,while IPO activity for smaller companieson AIM reduced significantly.

The WSE has seen a continuousincrease in the volume of IPOs from2004 to 2007 with a marginal decreaseseen in 2008. After decreasing in 2005and 2006, an increase in the offeringvalue has been seen in 2007 and 2008.The WSE was the only Europeanexchange to see an increase in offeringvalue in 2008.

With the exception of 2008, there havebeen significant increases in thenumber of IPOs on other exchanges,including the Oslo Bors and OMX;however the offering value has beenrelatively low.

NYSE Euronext, on the other hand,experienced a steady increase in thenumber of IPOs over the four yearperiod to 2007 before declining in 2008,however the offering value hasdecreased continuously since 2005.

Deutsche Börse saw a drop in thenumber of IPOs in 2007 and 2008 withthe offering value gradually increasingbetween 2004 and 2006 and flat in2007 before decreasing sharply in2008.

Volumes of IPOs on the Borsa Italianaand BME (Spanish Exchanges)increased steadily over the period from2004 to 2007, however the number andoffering value of IPOs on the BorsaItaliana and BME declined sharply in2008 as a result of the poor economicconditions. BME enjoyed a spectaculargrowth in offering value in 2007 as aresult of two large IPOs, however sawonly one IPO in 2008.

IPOs in the last five years

400

350

300

250

200

150

100

50

02004 2005 2006 2007 2008

Volume of IPOs over the past five years1

Num

ber o

f IPO

s

NYSE EuronextLondonDeutsche Börse

1 Excluding investment companies

35,000

30,000

25,000

20,000

15,000

10,000

5,000

02004 2005 2006 2007 2008

Offering value over the last five years1

Offe

ring

valu

e (m

m)

NYSE EuronextLondonDeutsche Börse

1 Excluding investment companies


There has been a 31% decrease in thevalue of equity traded from m22,124bnin 2007 to m15,345bn in 2008,reflecting investor uncertainty in thecurrent economic climate acrossEurope. In line with previous years, therelative proportions of the total equitytraded across the European exchangeshave remained broadly consistent.

London saw a 41% drop in its equitytrading and its proportion of the overallvalue of trading in Europe fell by 4%,while Deutsche Borse had aproportionately smaller decrease intrading and saw its contribution rise to17% of the total in 2008 from 14% in2007.

Where is the liquidity in Europe?

Value of equity trading 2008 (total trading was m15,345 billion)1,2

Borsa Italiana 7%

BME (Spanish Exchanges) 11%

Deutsche Börse 17%

Other 3%OMX 6%

SIX Swiss Exchange 7%

NYSE Euronext 20%

London 29%

m

m

Value of equity trading 2007 (total trading was m22,124 billion)1,2

Borsa Italiana 8%

BME (Spanish Exchanges) 10%

Deutsche Börse 14%

Other 4%OMX 6%

SIX Swiss Exchange 6%

NYSE Euronext 19%

London 33%

1 Data has been sourced from World Federation of Exchanges (WFE).2 No data available for individual exchanges within OMX from WFE; OMX Exchanges include Copenhagen, Helsinki, Stockholm, Iceland, Tallinn, Riga and Vilnius Stock Exchanges. No data

available for individual exchanges within BME from WFE; BME (Spanish Exchanges) comprises Madrid, Barcelona, Bilbao and Valencia stock exchanges, MF Mercados Financieros, Iberclear andBME Consulting.


The market capitalisation of theEuropean exchanges decreasedsignificantly in 2008, falling fromm11,635bn in 2007 to m6,307bn in2008, a 46% drop. This decrease wasspread relatively evenly across all ofthe exchanges, with the largest fall inmarket capitalisation value being

experienced by the largest exchange,NYSE Euronext. London and NYSEEuronext continued to contribute thehighest value of the Europeanexchanges, forming 47% of the totalmarket capitalisation in 2008 (48% in2007).

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

20072008

Mar

ket C

apita

lisat

ion

(mbi

llion

)

Market capitalisation of exchanges3

Other

OMX

Borsa Italiana

SIX Swiss Exchange

BME (Spanish Exchanges)

Deutsche Börse

NYSE Euronext

London Stock Exchange

Where is the value in Europe?

3 Market capitalisation figures exclude investment companies.


2008 was a disappointing year in termsof the volume and value of IPOs inEurope as well as in terms of generalequity trading activity on the markets asa result of investor uncertainty in thecurrent economic climate. The marketvolatility which started towards the endof 2007 continued through 2008 andinto 2009 and it is difficult to predictwhen investor appetite for IPOs mayreturn. The collapse in the creditmarkets has reduced marketconfidence and created a decrease inequity values and a flight to quality, withinvestors focusing on defensive stocks,gilts, cash and a move away from smalland micro caps.

High level trends in IPO volumes tendto track the economic cycle, with strongcorrelations seen between the volumeand value of IPOs and equity prices.This was particularly evident in the1980s and 1990s where the highvolume and values of IPOscorresponded to periods of strongeconomic growth and increasing stockmarket valuations, and in the late 1970s,the early 1990s and the early 2000swhen the low volume and values ofIPOs occurred during recessions andperiods of weak economic growth.

The recovery of IPO volumes acrossEurope is dependent on the return ofmarket confidence and the reduction involatility of equity securities, asuncertainty in the valuation of equitysecurities acts as a disincentive tocompanies considering an IPO. It isclear that 2009 will be a period ofdifficulty for developed economies withthe postponement of consumption andinvestment decisions due to erodedconsumer and business confidence anda lack of credit. Stock markets generallyrecover before economic statistics reflectimprovement in the economy; thusequity values are therefore a leadingindicator of the business cycle.

Equity values are expected to remaindepressed until market perceptionindicates that the business cycle is dueto enter a period of expansion. It islikely to be a combination of the returnof market confidence and the IPO of anumber of defensive stocks that providethe catalyst for the re-opening of theIPO market. Defensive stockscommand higher equity valuationsduring periods of economic downturntherefore these companies are the mostlikely candidates to lead a recovery inIPOs. The cost of credit in thewholesale markets has continued torise which has resulted in difficulties forcompanies attempting to refinance, andit is estimated that there is currentlyapproximately £120 billion of non-leveraged loans maturing in 2009 with afurther £260 billion maturing in 2010 inWestern Europe1. It is likely that, dueto limited credit being available, aportion of this debt will be refinancedthrough equity offerings.

Since 1855 the average recession haslasted approximately 18 monthsalthough, since the end of World War IIrecessions have lasted on average 10months, varying in length from sixmonths to eighteen months. Onaverage, the stock markets havetended to bottom four to six monthsprior to the end of the recession.Recent research in “The Aftermath ofFinancial Crises” by Reinhart andRogof suggests that recessions aroundbanking crises tend to be longer thanother recessions and that the globalnature of the current crisis will make itfar more difficult for many countries togrow their way out through higherexports or foreign borrowings.

The International Monetary Fund (IMF)projected in January 2009 that worldeconomic growth will fall to 0.5% in2009 compared to the 5.2% growthseen in 2007 and 3.4% growth in 2008.In advanced economies, output isforecast to contract by 2.0% in 2009whilst in emerging economies growth isexpected to slow appreciably but stillreach 3.3% in 2009. These forecastsare based on the policies in place inJanuary 2009, however further globalaction and Government policyintervention to support financial marketsmay limit this decline. The IMF expectsthat the global economy will experiencea gradual recovery in 2010.

The equity markets historically lead thebusiness cycle by four to six monthsand, given recent IMF forecasts, mostmarket commentators do not expectequity prices to recover until late 2009at the earliest and possibly not until2010. IPO volumes will follow this trendand, because the IPO process itselftakes on average between four and sixmonths, IPO volumes are likely to lagbehind the initial recovery of equityprices, which suggests a recovery inthe IPO market towards the end of thefirst half of 2010.

What does the future hold for theEuropean exchanges?

1 PwC UK Debt Market Outlook 2009, published November 2008.

The Industrial Goods & Servicessector saw a 59% decrease in thenumber of IPOs and a 95% fall in themoney raised in 2008. The 60 IPOs inthis sector raised m711m in 2008compared to 147 IPOs raising a total ofm13,604m in 2007.

London accounted for 82% of the totaloffering value raised by IndustrialGoods & Services companies in 2008,including the two largest IndustrialGoods & Services IPOs this year, beingthat of Globaltrans Investment andTaewoong Co. Globaltrans Investmentis a Russian logistics company whichlisted on Londonʼs Main Market andraised m287m by way of a GDRoffering. Taewoong Co is a SouthKorean engineering company whichlisted on Londonʼs PSM market andraised m184m. Overall, London hasseen a reduction of 71% in the volumeof Industrial Goods & Services IPOscompared to 2007 and a larger fall of83% in the respective offering value.

The most active market by volume, andthe second largest market by offeringvalue, of Industrial Goods & ServicesIPOs during the year was the WSEwhich hosted 24 IPOs with an offeringvalue of m86m, compared to 27 IPOsraising m277m in the prior year.Luxembourg was the third largestexchange by offering value during theyear with respect to Industrial Goods &Services companies, with five IndianGDR offerings raising m28m.

The second largest sector in 2008 wasInvestment Companies. There were50 IPOs within this sector in 2008raising m4,028m, representing a 58%decrease from the 119 IPOs in 2007which raised m16,096m.

Londonʼs Main Market saw a reductionfrom 37 IPOs by investment companiesin 2007 to 22 in 2008 with a decrease inthe offering value by 58% fromm5,373m in 2007 to m2,232m in 2008.While this reduction is significant, it isproportionally less than the reductionexperienced in other sectors, and

indeed four of the top ten EuropeanIPOs by money raised in 2008 wereinvestment companies.

The number of IPOs of investmentcompanies on Londonʼs AIM marketreduced significantly in 2008 with 14IPOs raising m671m compared with 44IPOs raising m4,014m in 2007.

Euronext saw two out of the fourinvestment company IPOs on NYSEEuronext in 2008, compared to eight ofthe ten investment company IPOs onNYSE Euronext in 2007.

IPOs by sector

Sector Volume of Movement in Volume ofIPOs 2008 the table IPOs 2007

Industrial Goods & Services 60 - 147

Investment Companies 50 - 119

Technology 37 - 91

Financial Services 19 - 51

Oil & Gas 18 - 37

Real Estate 18 - 1 51

Food & Beverage 15 + 3 29

Personal & Household Goods 14 + 3 26

Telecommunications 14 + 6 21

Utilities 14 + 7 19

Retail 13 + 4 22

Construction & Materials 13 + 7 17

Media 10 - 3 33

Pharmaceuticals & Biotech 9 - 3 32

Travel & Leisure 9 - 2 30

Mining 8 - 24

Health Care 6 + 6 12

Chemicals 4 + 7 6

Banks 2 + 3 15

Automobiles & Parts 2 + 4 12

Basic Resources 1 + 1 16

Insurance 1 + 4 9

Total 337 819



Andy Morgan, Partner, PwCCorporate Finance:

“The Technology sector was certainlynot alone, but the chill winds which hadstarted to impact markets towards theend of 2007 turned into a real deepfreeze as the effects of the “creditcrunch” took hold in 2008.

A meagre m447m was raised in 37 newlistings across Europe in the sectorduring 2008. This was down 59% involume terms and a massive 90% infunds raised, with not a single IPOraising new funds and breaking thegloom after the end of July, once thebanking crisis had really taken hold.

In reality, 2008 witnessed a materialcontraction in the stock of listedEuropean technology companies asmany significant players left the publicmarkets – either through succumbingto the advances of a strategic tradeacquirer, or deciding to pursue theirgrowth strategies outside the publiceye through a Public to Privatetransaction.

Only six companies managed to raisemore than m10m on IPO during theyear. The only bright spot was them315m listing of leading solar inverterdeveloper SMA Solar Technology inGermany.

With no immediate end in sight to themarket volatility, and increasingconcerns over the depth and longevityof the global downturn, IPOs in thesector are likely to be few and farbetween in 2009. The more optimisticcommentators may be predicting someeasing and recovery towards the endof 2009, however any aspiringtechnology market debutants will needa truly compelling and clearly visibleequity growth plan to convince nervous

investors to step back into the market.”

The Financial Services sector hasseen a decrease of 63% in the numberof IPOs from 51 in 2007 to 19 in 2008.Money raised fell by 74% fromm3,221m in 2007 to m829m in 2008.The largest IPO in this sector was byGlobal Investment House, a Kuwaitifinancial services company raisingm735m on Londonʼs Main Market.

Nick Page, Partner, PwC TransactionServices:

“2008 was a comparatively slow yearfor IPO activity by European financialinstitutions (the financial servicessector together with banking andinsurance) with only 22 deals ascompared to 75 in 2007. Theaggregate funds raised amounted tom1,565m of which the majority wasraised by the Kuwaiti firm GlobalInvestment House (m735m), theCommercial Bank of Qatar (m444m)and Spanish savings bank Caja deAhorros del Mediterraneo (m292m).The first two of these were Londonmain market listings which provideconfirmation of the rising importance ofMiddle Eastern financial institutions inthe international markets.

Seven of the 22 IPOs were domesticlistings on the Warsaw StockExchange; the prominence of listings inWarsaw is evidence of the growingsignificance of financial services in oneof Europe’s largest emergingeconomies, and could prove to be thestart of an important trend.

Both the London and Euronextexchanges featured prominently aslisting destinations with six and fivetransactions respectively. Thecomparable number of transactionsunderlines the perceived competitionbetween Europe’s two largest

The largest investment company IPO in2008 was by BH Global which raisedm674m on Londonʼs Main Market. Noinvestment companies raised over m1bnon any European exchange in 2008compared to three in 2007: the Spanishbased Criteria Caixa Corporation, raisingm3,452m on BME (Spanish Exchanges);3i Infrasture Limited which raisedm1,147m on Londonʼs Main Market;and Gottex Fund ManagementHoldings which raised m1,002m on the SIX Swiss Exchange.

Pars Purewal, Partner, PwCAssurance:

“It is no surprise that the number ofIPOs in 2008 in the investmentcompany sector has fallensubstantially. In 2006 and 2007 wesaw a significant number of real estate,hedge fund of fund and private equityfund of fund IPOs which supported thevery strong markets that these sectorswere experiencing. These when addedto the more traditional investmentcompany launches meant this sectorhas had a lot of activity during 2006and 2007. During the second half of2008, investors have been running forthe hills and IPOs of these alternativeinvestment opportunities have fallen offa cliff. Indeed of the 50 IPOs in 2008only 17 of these were in the secondhalf of the year and the prospects for2009 do not look good and in theseturbulent times, it is still difficult to saywhen investor appetite will return.”

The number of Technology sectorIPOs decreased from 91 in 2007 to 37in 2008. Money raised decreasedsignificantly by 90% from m4,433m in2007 to only m447m in 2008. Thelargest IPO in this sector was that of theGerman solar technology developerand manufacturer, SMA SolarTechnology which raised m315m on theDeutsche Börse.

IPOs by sector


exchanges.

Looking into 2009 the financial servicessector is anticipated to generate M&Aactivity as the larger Europeanfinancial institutions review theirbusiness portfolios as they facecontinued capital pressure. Weanticipate that some of this activity willlead to IPOs of financial servicesbusinesses across a number ofexchanges, although more likely laterin the year than earlier.”

The number of IPOs in the Oil & Gassector decreased from 37 in 2007 to 18in 2008. Money raised fell by 70% fromm1,846m in 2007 to m553m in 2008.11 of the 18 oil and gas IPOs in 2008were on Londonʼs AIM marketcompared to 14 of the 37 in 2007.

Brian Puffer, Partner, PwCAssurance

“The economic downturn continues tohit the oil and gas sector of theEuropean markets with a 51%decrease in the number of IPOs in2008 down from 37 in 2007 to 18 in2008.

London’s AIM exchange suffered fewerrepercussions however, and while thenumber of IPOs fell from 14 to 11, itsmarket share by volume of thosecompanies within the oil and gas sector

increased from 38% in 2007 to 61% in2008.”

The Real Estate sector has shown a65% decrease in IPO activity in 2008with 18 IPOs compared to 51 in 2007.The largest real estate company wasPalm Hills Development which raisedm189m on Londonʼs Main Market.

NYSE Euronext was the most popularexchange for real estate IPOs in 2008.It hosted seven IPOs with four IPOs onEuronext, two on the Marché Libre andone on Alternext. London and the WSEwere the most popular exchanges forreal estate IPOs in 2007.

John Waters, Partner, PwCAssurance

“European real estate companies haveseen significant falls in the valuation oftheir portfolios in the last six months.Where companies have covenantsbased on gearing or loan to value,which are common in real estate, thefalls in value have inevitably led tosignificant tightening and potential oractual breaches of covenants. Thismay lead companies to raise equity tobolster their balance sheets and toraise funds in the anticipation ofacquiring property at or near thebottom of the market.”


The IPO Watch Europe survey currentlytracks the volume and value of IPOsacross all the main Europeanexchanges. Inevitably, over time thereare developments such as theintroduction of new markets or changein or segmentation of existing markets,and we have continued to monitorthose exchanges and those types oftransactions that are included in thesurvey. During 2009, we intend toconsult with the exchanges acrossEurope regarding the content andpresentation of the IPO Watch Europesurvey and may as a result makeimprovements to our survey asappropriate.

Certain markets that are not currentlyincluded within the IPO Watch Europesurvey have been relatively active,particularly the First Quotation Board ofDeutsche Börse but also other marketssuch as those operated by the PLUSMarket plc (“PLUS”) in London. Thissection discusses the nature andactivity of those markets.

First Quotation Board

In October 2008, Deutsche Börserestructured its existing third market,the Open Market, and introduced theFirst Quotation Board as a newsegment. The First Quotation Board isan exchange-regulated market of theFrankfurt Stock Exchange. It now hostsall primary offerings made onto theOpen Market, providing greater visibilityfor initial listing of shares anddepository receipts. It is primarilyaimed at qualified investors who areable to assess and bear the significantrisks that are likely to be associatedwith an equity investment listed on theFirst Quotation Board.

The introduction of the First QuotationBoard was the Deutsche Börseʼsresponse to the increasing number ofinitial listings on the Open Market.Since 2005 companies haveincreasingly been using the OpenMarket as a way to offering their sharesfor trading without being required tomeet any continuing obligations. Themajority of companies listed on the FirstQuotation Board are from outsideGermany.

Rainer Riess, Managing DirectorCash Market Development, DeutscheBörse

“The difficult market conditions in 2008also had an impact on companiesconsidering an IPO. While the numberof new admissions decreased in theprimary market, Deutsche Börserecorded an increase to 177 newmarket entries (2007: 147 companies)on the First Quotation Board.Deutsche Börse restructured the OpenMarket in October 2008. All initiallistings in the primary market segmentare now grouped in the First QuotationBoard. This new sub-segmentaccommodates the rising number ofinitial listings in the Open Market.”

PLUS

PLUS is a Recognised InvestmentExchange in the UK and wasestablished in December 2005 as anew small and mid-cap stock exchangefor London. PLUS operates twoprimary markets, the PLUS-listed andPLUS-quoted markets, as well as asecondary trading market (PLUS-traded).

The PLUS-listed market is an EU-regulated market open to companies,funds or market professionals issuingequity, debt, depository receipts andspecialist securities, such as structuredproducts and exchange traded funds.

PLUS-quoted is an exchange-regulatedmarket for smaller, growing companies.The PLUS-quoted market offers adisclosure-based regulatory frameworkand does not impose specific eligibilitycriteria but instead requires companiesto meet certain basic standards.

PLUS has disclosed that it hosted 15new admissions in 2008, a decrease of71% from the 52 new admissions in2007. It appears that the large majorityof these new admissions were on thePLUS-quoted market.

Other European Markets


Comparison with the US

350

300

250

200

150

100

50

02004 2005

Volume of US IPOs

2006 2007 2008

236205

Num

ber o

f IPO

s

52

23

14

43

244

Investment companies1

IPOs excluding investment companies

213

50,000

45,000

40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

02004 2005

Offering value of US IPOs (mm)

2006 2007 2008

37,543

27,484

35,910

Offe

ring

valu

e (m

m)

Investment companies1

IPOs excluding investment companies

39,649

16,4622,630

7,729

3,754

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

Offe

ring

valu

e (m

m)

Q1 Q2

2007 2008

Q3 Q4 Q1

US Europe

US v Europe quarter on quarter by offering value (mm)

Q2 Q3 Q4

The credit crisis and resulting globalfinancial turmoil caused US IPO activityto come to a near halt in mid-2008,resulting in dramatic reductions of boththe number and volume of IPOs acrossthe US exchanges compared to theprior year. The volume and offeringvalue of US IPOs fell by 81% and 60%,respectively, to 57 IPOs raising a totalof m19,092m in 2008 from 296 IPOs

raising a total of to m47,378m in 2007.It should be noted that the deteriorationof the US dollar against the Euro in2008 has adversely impacted the yearon year comparison of US IPO valuesas presented in Euros. On a constantexchange rate basis, money raised onthe US exchanges in 2008 was 55%lower than in the prior year.

1 Data in respect of investment companies is not available for 2004 and 2005


In 2008, for the first time after aninterval of three years, the USexchanges outperformed the Europeanexchanges in terms of the total amountof new money raised, putting the US infirst place by offering value in 2008ahead of both Europe and GreaterChina. The average offering value ofIPOs in the US was also higher thanthat seen in Europe and Greater China.

Despite the large fall in IPO activity,2008 saw the largest IPO offering in UShistory, by Visa on NYSE which raisedm11,510m ($17,864m) in the firstquarter and accounted for 60% of thetotal offering value in the US in theyear. The second and third largest USIPOs also took place on NYSE. Thesecond largest was that of AmericanWater Works Company which raisedm792m ($1,247m), followed by IntrepidPotash which raised m609m ($960m).

The US exchanges attracted 17international IPOs which raisedm1,217m in 2008 compared tom12,107m raised by the 56international IPOs in 2007. Of these 17international IPOs, seven were fromChina, which continues to be thelargest source of international IPOs onthe US markets. Of the remaining 10international IPOs there were two eachfrom Greece and the Cayman Islands

and one each from Bermuda, Canada,Hong Kong, Korea, the Netherlandsand the United Kingdom. Thiscompares to the 81 international IPOsraising m6,018m in Europe, illustratingthat Europe continues to remain thepreferred destination for internationalIPOs. Additionally, Europe experiencedless significant falls in the number andvalue of international IPOs than the US.In value terms international IPOsrepresented 43% of the total IPOs inEurope in 2008, compared to just 6% inthe US.

140

120

100

80

60

40

20

0US

2007Europe2007

International IPOs by volumeUS v Europe

US2008

Europe2008

81

131

17

56

Num

ber o

f IPO

s

25,000

20,000

15,000

10,000

5,000

0US

2007Europe2007

International IPOs by offeringvalue US v Europe (mm)

US2008

Europe2008

6,018

21,573

1,217

12,107

Offe

ring

valu

e (m

m)

Stock Exchange IPOs Offering value IPOs Offering value2008 (mm) 2008 2007 (mm) 2007

Europe total 337 13,957 819 80,473

NYSE 17 14,868 83 24,886

Nasdaq 26 1,974 154 15,046

NYSE Alternext (1) 14 2,250 59 7,446

US Total 57 19,092 296 47,378

(1) On 1st October 2008, NYSE Euronext completed its acquisition of the American Stock Exchange (AMEX), rebranding it asNYSE Alternext (“Alternext”).

Comparison with the US


The ʻGreater Chinaʼ region comprisesHong Kong (Main Board plus GEM);Shanghai (A plus B); Shenzhen (A plusB); and Taiwan.

In line with global trends, the markets inthe Greater China region have beensignificantly affected by the volatility inthe financial markets. In 2008, thenumber of IPOs in Greater Chinadecreased by 35% to 157 from 240 in2007. The total offering value fell fromm76,333m in 2007 to m16,041m in2008, a decline of 79%.

All of the exchanges within GreaterChina have shown a fall in the moneyraised in 2008 from 2007, with thelargest decreases of 84% and 79%seen on the Shanghai and Hong Kongexchanges respectively. This is partlydown to the decrease in the volume ofIPOs in 2008 which fell from 23 to sixon the Shanghai exchange and from 86to 49 on the Hong Kong exchange, butas seen elsewhere, values havedecreased more steeply than volumes.

The Shenzhen exchangeʼs 71 IPOs in2008 represents a fall of 30% on the101 IPOs experienced in 2007, whilethe m2,942m offering value in 2008 was32% down on the m4,305m raised in2007.

The volume of IPOs on the Taiwanexchange actually saw a marginalincrease from 30 in 2007 to 31 in 2008,however the offering value fell by 60%from m417m in 2007 to m166m in 2008.

The total offering value in GreaterChina grew so significantly in 2007 thatit was nearly on a par with the total forEurope of m80,473m and significantlyexceeded funds raised in the US. In2008 the total offering value in GreaterChina exceeded the total offering valuefor Europe by 13%, however there werefewer IPOs in Greater China with 157compared with 337 in Europe.

Comparison with Greater China

300

250

200

150

100

50

0

100,000

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

Num

ber o

f IPO

s

Offe

ring

valu

e (m

m)

Number of IPOs

Offering value

2006 2007 2008

IPOs and Offering Value of Greater China IPOs1,2

Stock Exchange IPOs 2 Offering value 1,2 IPOs 2 Offering value 1,2

2008 (mm) 2008 2007 (mm) 2007

Europe total 337 13,957 819 80,473

Shanghai 6 7,173 23 43,853

Hong Kong 49 5,760 86 27,758

Shenzhen 71 2,942 101 4,305

Taiwan 31 166 30 417

Greater China Total 157 16,041 240 76,333

1 The offering value of IPOs in Greater China includes over-allotment or greenshoe amounts.

2 Companies from Greater China are able to list a different class of shares on the different Greater China exchanges. In these cases, the data above includes the value of shares listed on each exchange and the listings as separate IPOs.


There were 49 IPOs on the Japaneseexchanges in 2008, a decrease of 60%in activity when compared to the 121IPOs in 2007. Once again, thereduction in offering value was greater,with the amount of money raised on theJapanese exchanges falling 71% fromm3,094m in 2007 to m897m in 2008.

The largest Japanese exchange byactivity and by offering value in 2008was JASDAQ with 18 IPOs raisingm431m in 2008 compared with 49 IPOsraising m465m in 2007. The Mainboard of the Tokyo Stock Exchangesaw its total offering value fall by 86%from m2,029m from 13 IPOs in 2007 tom280m from seven IPOs in 2008.

Yoshiyuki Ohashi, Partner, PwCJapan:

“In 2008 the number of IPO companieshas continuously and dramaticallydecreased from 121 to 49 due to theeconomic factors such as the globaleconomic crisis as well as lower IPOproceeds due to the decline of stockmarket prices in Japan. The averageoffering value has decreased fromJPY4,124m to JPY2,792m and thenumber of companies with an offeringvalue over JPY10bn has decreasedfrom 10 to four. For 2009 the numberof IPO companies is likely to be at thesame level or less than that in 2008.”

Early in 2009, the Tokyo StockExchange and the London StockExchange announced a new jointventure, TOKYO AIM. This is a newmarket for growing companies in Japanand Asia and will adopt a regulatoryframework similar to that of LondonʼsAIM market.

Comparison with Japan

200

180

160

140

120

100

80

60

40

20

0

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

Num

ber o

f IPO

s

Offe

ring

valu

e (m

m)

2006 2007 2008

IPOs and Offering Value of Japanese IPOs1

Number of IPOs

Offering value

Stock Exchange IPOs Offering value 1 IPOs Offering value 1

2008 (mm) 2008 2007 (mm) 2007

Europe total 337 13,957 819 80,473

JASDAQ 18 431 49 465

Tokyo Stock Exchange (Main) 7 280 13 2,029

Mothers 12 146 23 336

Hercules 9 31 25 203

Others 3 9 11 61

Japan Total 49 897 121 3,094

1 The offering value of IPOs in Japan includes over-allotment or greenshoe amounts.


In 2008, the Gulf Cooperation Council(GCC) stock exchanges saw 25 IPOs,which represents a 26% fall in thenumber of IPOs when compared to the34 seen in 2007. A total of m7,955mwas raised during 2008 as compared tothe m9,057m raised in the previousyear, a decrease of 12% in fundsraised. The Saudi Stock Exchange(Tadawul) accounted for 83% of thetotal amount raised in the regionthrough 13 IPOs which were all in thefirst three quarters of 2008 and whichraised m6,629m.

The Saudi Arabia market took the topfive spots for the largest IPOs byoffering value in the region, whichincluded Alinma Bank raising m1,913mand the Saudi Arabian Mining Companyraising m1,685m. The UAE showed animprovement in terms of the number ofIPOs, which increased to eight fromfour in 2007 but showed a sharp fall inthe total amounts raised which fellsignificantly to m862m compared tom5,087m in 2007. This fall was largelyattributable to the effect of the DPWorld IPO, which raised approximatelym4bn in November 2007. Financialservices sector companies continued todominate the type of entities listing, butto a lesser degree, with nine IPOs fromthat sector in 2008 down from 21 in2007. The 2007 number of IPOs in thatsector was high due to the largenumber of insurance companies listingon the Saudi market. The next mostpopular sectors were Oil and Gas andConstruction, both with three IPOs eachin 2008 – up from one and two IPOsrespectively in 2007.

Steve Drake, Partner, Capital MarketsGroup, PwC Dubai:

“IPO activity in the last quarter of 2008was very limited and the outlook for2009 remains pessimistic reflecting thepredominantly negative sentiments ofthe investors in the region and highmarket volatility. The once healthy IPOpipeline of six months ago has dried upas companies delay their IPO plans inview of the current economicconditions. The GCC markets are not

expected to revive before the end ofthe third quarter of 2009 as the regionconsolidates and seeks to rebuildinvestor confidence. Companiesdelaying their IPO plans need to takethis opportunity to identify and addressthe key IPO issues they will face sothat when the equity markets do turnaround, they are ideally placed to takeadvantage of what may be a small IPOwindow.”

Comparison with the Middle East

40

35

30

25

20

15

10

5

0

9,200

9,000

8,800

8,600

8,400

8,200

8,000

7,800

7,600

7,400

Num

ber o

f IPO

s

Offe

ring

valu

e (m

m)

2007 2008

IPOs and Offering Value of GCC IPOs1

Number of IPOs

Offering value

Stock Exchange IPOs Offering value 1 IPOs Offering value 1

2008 (mm) 2008 2007 (mm) 2007

Europe total 337 13,957 819 80,473

Saudi Arabia 13 6,629 26 3,521

UAE 8 862 4 5,087

Qatar 1 349 2 284

Kuwait 1 67 - -

Oman 2 48 1 114

Bahrain - - 1 51

GCC Total 25 7,955 34 9,057

1 The offering value of IPOs on the GCC includes over-allotment or greenshoe amounts.


With the key elements of the EUCommissionʼs Financial ServicesAction Plan now well establishedin member states, developmentsin EU capital markets regulationhave focused on GAAPequivalence, and ongoingdevelopments will mainly consistof fine tuning existing regulations.NYSE Euronext has introduced a“Fast Path Listing” procedurewhich allows the use of SECfilings by non-EU issuers. InLondon, the FSA is consulting onamendments to the Listing Ruleswhich would result in there being“Standard” and “Premium” listings,and the UK government hasagreed a series ofrecommendations impactingrights issues.

GAAP equivalence

Under the EU Transparency andProspectus Directives there is apresumption that all financialinformation will be presented inaccordance with IFRS for listedcompanies, although provisions allownon-EEA issuers to use an “equivalentGAAP”.

The EU Commission has determinedthat the GAAPs of US, Japan, China,Canada, South Korea and India areequivalent to IFRS. The EUCommission will review the situation forChina, Canada, South Korea and Indiaby 2011, in line with those countriesʼrespective plans to converge with IFRSby that time, and will monitor theongoing status of equivalence.

The EU Commission’s agenda

The EU Commission is reviewing theProspectus, Transparency and MarketAbuse Directives. Changes are beingconsidered that would address someareas that were not working asefficiently as the EU Commission wouldlike, or where there were unintendedconsequences such as how employeeshare schemes are treated under theProspectus Directive.

An independent study of national “goldplating” of transparency obligations hasbeen commissioned to assist the EUCommission in evaluating theTransparency Directive in 2009. Inaddition a review of the Market AbuseDirective is underway, and the EUCommission intends to consider thepossibility of simplifying some of theprovisions.

Fast path listings

The NYSE Euronext countries ofFrance, the Netherlands, Belgium andPortugal have initiated the adoption of a“Fast Path listing” procedure that allowsthe use of SEC filings by issuersregistered in non-EU countries. Aprovision of European law, which hasbeen little used to date, allowsregulatory authorities to approve aprospectus drawn up under thelegislation of a third country. The statedintention is that this fast path procedureis restricted to an initial marketintroduction; however there is nothingto stop this being extended to publicoffers, which could prove attractive toissuers.

Developments in London

In response to concern that the differentstandards applied to primary,secondary and GDR listings in Londonmay provide some scope for confusionand could be endangering the London“badge of quality”, the UKʼs Financial

Services Authority has considered theissue of market segmentation, and inDecember 2008 issued a consultationpaper on potential changes to theListing Rules.

The principal changes proposed are:labelling listings as “Standard” if theymeet the EU minimum standards and“Premium” if they meet the “super-equivalent” Listing Rules; and openingup the possibility of such a “Standard”listing to UK companies wishing to listequities in London. While particularattention was given to GDRs and awide range of alternatives includingchanging the current disclosure regimeand requiring sponsors for GDRtransactions were considered, theconsultation paper does not make anysignificant changes impacting GDRsother than the overall labelling point,whereby GDR listings would be labelledas “Standard”.

The impact of these proposals on theUK FTSE indices has not yet beencommunicated although it is likely that,consistent with current practice, onlycompanies with a Premium listing willbe eligible for inclusion in those indices.

In November 2008 the Rights IssueReview Group published proposalsarising from its market consultation onpotential reforms to the UK rights issueprocess, following problemsexperienced in the first half of 2008 bycompanies, particularly banks,undertaking capital raisings. Theproposals have been reflected inamendments to regulations with effectfrom 10 February 2009. The mainimpact is to reduce the minimum timefor a rights issue process in the UKfrom the current 23 days (or 39 days ifa general meeting is required) to 16days (or 32 days if a general meeting isrequired).

Developments in European CapitalMarkets Regulation


IPO Watch Europe surveys all newprimary market listings on Europeʼsprincipal stock markets and marketsegments (including exchanges in theEU member states plus Switzerland andNorway) on a quarterly basis.Movements between markets on thesame exchange, re-admissions, reversetakeovers and greenshoe offerings areexcluded. The IPO Watch Europe –Review of the year 2008 collates datafrom the quarterly surveys conductedbetween 1 January and 31 December2008 capturing new market listingsbased on their listing date.

IPO Watch Europe – Review of the year 2008 was compiled by

Tom TroubridgeRichard WeaverDavid Smailes Sarah Harvey Lucy TarletonAmy BenningDaniel BarkerTony Leigh

Should you have any questions regarding this publication please contact:

Derek Nash Tel: +44 (0) 207 804 3058 [email protected]

All of the graphs, tables, and data used within this publication have been collated bythe Capital Markets Group research team.

In collating this information, we rely upon data provided directly by variousexchanges, we do not carry out any confirmation procedures on that information.

The 2007 figures stated herein for the Warsaw Stock Exchange differ from thosestated in our quarterly IPO Watch Europe press releases, as the Warsaw StockExchange has revised their data for the full year.

Further (hard) copies of this publication are available from thePricewaterhouseCoopers publications department on +44 (0) 207 212 4883.

About IPO Watch Europe


The Capital Markets Group in Londonis part of the Assurance practice ofPricewaterhouseCoopers LLP. Itcomprises a core team of specialistswho provide a broad range of servicesto companies and investment banks inconnection with London capital markettransactions. These includepreparations for becoming a publiccompany, selecting the right market

and advisory team, assisting withreviewing accounting practices andGAAP conversion projects, advising onregulatory issues and undertakingfinancial and business due diligenceinvestigations. The Capital MarketsGroup in London is part of thePricewaterhouseCoopers globalnetwork of capital market specialists.

About the Capital Markets Groupin London

Key Contacts

Tom Troubridge Tel: +44 (0) 207 804 4723 [email protected]

Richard Weaver Tel: +44 (0) 207 804 3791 [email protected]

Clifford Tompsett Tel: +44 (0) 207 804 4703 [email protected]

Ursula Newton Tel: +44 (0) 207 212 6308 [email protected]

Richard Spilsbury Tel: +44 (0) 207 212 3887 [email protected]

Mark Hughes Tel: +44 (0) 207 804 3824 [email protected]

Capital Markets European NetworkKey Contacts

Austria Aslan Milla Tel: +43 (1) 501 88 1700 [email protected]

Belgium Peter d'Hondt Tel: +32 (0) 2 710 7227 [email protected]

Cyprus Nicos Theodoulou Tel: +357 22 55 5587 [email protected]

Denmark Jens Otto Damgaard Tel: +45 (0) 39 45 3410 [email protected]

Finland Netta Mikkila Tel. +358 (0) 9 2280 1386 [email protected]

France Thierry Charron Tel: +33 (0) 156 57 12 33 [email protected]

Germany Nadja Picard Tel: +49 (0) 211 981 2978 [email protected]

Greece Nicholas Peyiotis Tel: +30 693 7075 031 [email protected]

Ireland John Loughlin Tel: +353 (1) 792 8551 [email protected]

Italy Gabriele Matrone Tel: +39 06 57025 2397 [email protected] Colombo Tel: +39 02 778 5524 [email protected]

Luxembourg Jean-François Kroonen Tel: +352 49 48 48 2527 [email protected]

The Netherlands Leandro van Dam Tel: +31 (0) 20 568 7144 [email protected] Coenen Tel: +31 (0) 20 568 7316 [email protected]

Norway Knut Olav Berg Tel: +47 95 26 13 90 [email protected]

Poland Tomasz Konieczny Tel: +48 22 523 4285 [email protected]

Russia Tomasz Konieczny Tel: +7 (495) 967 6470 [email protected]

Spain Rocio Fernandez Tel: +34 915 685 052 [email protected]

Sweden Lennart Danielsson Tel: +46 (8) 555 333 35 [email protected]

Switzerland Michael Abresch Tel: +41 (0) 58 792 21 20 [email protected]

PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 146,000people in 150 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.

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