As the new wave of crisis throws the world stock market into a coma, domestic companies that planned to list their stock on the public exchanges to draw capital are back at the bottom of the ladder, KW writes this week.
According to Ernst&Young, the volume of transactions in Q3 dropped more than twofold compared to the Q2 from US $65.6 bn to US $ 28.5 bn. As calculations of Dealogic analytical agency show, in Q 3 2011 listings of 22 IPOs were postponed and 49 – recalled. There are, in fact, many Ukrainian issuers among the companies that failed to sell shares at western stock exchanges.
“Some 12-15 Ukrainian companies had IPO plans this year. They could in total attract up to US $1 bn,” Managing Director and Head of Investment Banking Department at Dragon Capital Brian Best told KW. “Five companies managed to realize this plan in the Q1. During that period, KGS Agro, Industrial Milk Company, Westa, Ovostar and Continental Farmers Group listed their securities at a public exchange. However, in the Q3, only two issuers managed IPOs – French ag company AgroGeneration that owns assets in Ukraine (attracted US $16 mn for NYSE-Euronext) and Coal Energy company (attracted US $81.4 mn of new share capital at Warsaw Exchange).
“I can list at least four IPOs of Ukrainian companies that never took place or were postponed due to unfavorable market conditions for H2, 2011. The total volume of these offerings amounts to some US $300 mn. In current conditions, investors, taking into account high market risks, will prefer to “sit on cash” and wait for more predictable market conditions,” notes Best.