The number of initial public offerings around the world is down year over year, but the value is about the same thanks to strong new issue activity in emerging markets, according to a new report from Ernst & Young.

The firm says that while the global IPO market was stagnant in the first half of this year, things have picked up in the second half, led by deals from Asia and South America. These two regions have raised US$68.6 billion in listings so far in 2009 accounting for 72% of the total IPO value, it reports.

Overall, the number of deals is down to 459 so far in 2009, compared to 740 IPOs for the same time period in 2008. However, Ernst & Yound notes that the capital raised globally so far this year is US$94.9 billion, which is on par with the amount raised in the first 11 months of 2008 (US$94.6 billion). It forecasts that the value of IPOs by year end should exceed US$100 billion.

“Emerging market activity has dominated IPO markets this year with Chinese companies the largest source of total funds raised globally. Brazil’s stock market has seen a flurry of activity, notably in financial services. China and Brazil are clearly playing an integral role in leading the global economic recovery,” said Gregory Ericksen, global vice chair strategic growth markets for Ernst & Young.

The firm notes that while the overall global value of IPO activity is essentially unchanged from last year, the value of deals in North America declined by nearly 38%, from US$26.6 billion in the first 11 months of 2008 to US$16.6 billion so far this year.

Additionally, European IPOs only accounted for 10% of total deals and US$5.0 billion in value. This compares with 22% of total IPO value last year. Deal value and activity has also fallen dramatically in the Middle East.

The firm also reports that industrials was the leading sector by number of deals (77 IPOs); followed by materials (68 issues); and high technology (55 deals). In terms of deal value, the leading sectors were financials (US$21.7 billion), industrials (US$16.1 billion) and real estate (US$9.5 billion).

The Hong Kong Stock Exchange is leading the way as a deal venue, accounting for 18.7% of capital raised (US$17.7 billion); followed by the New York Stock Exchange at 17.9% (US$16.9 billion); and, the Shanghai Stock exchange at 17.0% (US$16.1 billion).

“Dynamic companies from emerging markets continue to list on their local stock exchanges. The principal exchanges in China, India, Brazil and other emerging markets are now mature enough to source funding for the very largest companies seeking listings,” notes Ericksen.

IE