FA poll

Facebook debut will give US big lead in global IPO stakes

In last week’s web poll, we asked our readers to say which IPO markets would be busiest during 2012. With Facebook’s megadeal coming next week, can Hong Kong or China catch up?

Facebook is going public in the US next week with an equity offering that is likely to raise more money than all the initial public offerings in Hong Kong or China so far this year.

At up to $13.5 billion, Facebook’s IPO would be one of the biggest ever — and just the kind of megadeal that once kept bankers in Hong Kong busy year-round, back when China’s big state-owned companies regularly rolled out huge (and often cheap) offerings that investors queued around the block to buy.

POLL RESULT

Where will IPO activity be busiest this year?

China
26%

Hong Kong
49%

US
21%

Europe
4%

During 2012, however, there have been few big deals in Hong Kong, or in China. And for the first time since 2008, the US could be the busiest IPO market in the world this year, so we asked our readers what they thought.

Most reckoned Hong Kong would top the list, ahead of China and then the US. A small number of voters even reckoned Europe would come out on top.

According to stock exchange data, Hong Kong IPOs have raised $3.1 billion so far this year, with just four deals raising more than $100 million, compared to a total of $10.6 billion in the US (even before Facebook). China has also been slow, so there is a lot of catching up to do if our readers are to be proved correct.

Such lacklustre performance is particularly worrying for the big investment banks. Morgan Stanley, Deutsche Bank, Goldman Sachs and UBS all made more than half their revenue in Asia from equity capital markets during 2011, according to Dealogic, so a slump in big IPOs could mean a tough year for ECM bankers.

“I’m glad I’ve got M&A on my business card these days,” said one former ECM banker in Hong Kong.

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