Bankers aren’t expecting much excitement in the U.S. market for initial public offerings this year, as China spends another year at the top.
About half of the 100 capital markets execs surveyed predict growth in IPOs this year, compared to 72% of those surveyed in advance of 2011, according to BDO USA, an accounting and consulting firm.
Only 16% of those surveyed expected any growth to be "significant," while 35% expect flat growth and 15% predicted that the market will continue to slide.
The overall figure matched bankers’ expectations for the health care market, where 50% of respondents expected growth for the year. Biotech markets ranked higher with 59% of bankers polled feeling optimistic about the market.
The gorilla in the room was the economy, according to the bankers. Nearly half cited a continued lack of confidence in the U.S. market; 43% cited uncertainty about unstable European economies, pointing to global political and financial stability as the biggest threat to the U.S. IPO market.
"This is, by far, the least positive forecast we’ve seen in the 3 years we’ve conducted the BDO IPO Outlook survey," BDO Capital Markets partner Brian Eccleston said in prepared remarks. "Economic concerns, both domestic and global, are the chief factors in the loss of confidence, according to the bankers."
Meanwhile, China spent a 3rd year at the top as the world’s largest IPO market in 2011, even as the total funds raised dropped 41% compared to 2010, according to PriceWaterhouseCoopers.
Chinese firms raised a total of $45.5 billion (¥286.6 billion) in IPOs launched last year, compared to $35.6 billion (¥224.3 billion) among U.S. firms. The accounting firm predicted that Chinese fund-raising would stay flat in 2012, Reuters reported.
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- Thoratec Corp. (NSDQ:THOR): UBS downgrades from "buy" to "neutral" based on $34 price target.
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- Volcano Corp. (NSDQ:VOLC): BMO downgrades to "market perform" from "outperform" with $26 price target.