Global IPO market surges, says Ernst & Young report.

The Global IPO market saw a surge in activity in the last quarter of 2003 and early 2004, and is currently showing signs of a rebound, according to the Ernst & Young Global IPO Survey.

Early indicators point to the continued emergence of the global IPO market.

Over just the last two quarters, a total of 639 worldwide IPOs raised $53 billion compared to $23 billion raised in 332 deals during the first two quarters of 2003.

The SARS outbreak in Asia and uncertainty over the Iraq war hindered IPO activity in the first half of last year.

However, stable economic conditions brought investors back into the market in the fourth quarter of 2003, igniting a flurry of activity.

If the current deal flow maintains its momentum, 2004 activity could match 1998 levels when $118 billion was raised from nearly 1,100 deals.

"The IPO market is open for business," said Joe Muscat, Chairman of the IPO Transformation--CEO Retreat. "There's an increase in economic confidence.

"Venture capitalists and private equity partners now have more visibility as to their exits, while bankers have another route to leverage to complete mergers or acquisitions."

Globally, Asia plowed full steam ahead in 2003 while IPO activity in the U.S. and Europe remained quiet compared to 2002 levels.

Asia accounted for 67% of global IPO volume and 52% of capital raised.

China was responsible for the lion's share of these transactions thanks to a solid economy that has been growing by nearly double-digits for a decade.

The largest worldwide IPO in 2003 was China Life which raised $3.4 billion on the NYSE.

With half a dozen Chinese companies heading for flotations this year, 2004 could be another hot year for IPOs in Asia.

"The IPO markets have become much more globalized," said Muscat. "We're seeing an increasing trend of companies in economies growing faster than the U.S., such as China, seek a cross-border listing.

Last year, several heavyweight crossborder issues raised over $500 million backed by international investors. There is investor appetite for these deals, however, foreign issuers face several challenges from a cultural, regulatory and behavioral standpoint.

As a result of the Sarbanes-Oxley Act of 2002, the dynamics are much different for foreign issuers."

Another sign of growing confidence is the increased demand for the Ernst & Young IPO Transformation--CEO Retreat held annually in May in Laguna Niguel, Calif. The IPO preparation event had over 70 private companies participating, the largest number in four years. Reflecting the increasingly global nature of IPOs, attendees at this year's event came from the United States, Canada, Israel, Ireland and the United Kingdom.

With the increased regulatory environment and Sarbanes-Oxley, the leaders of future public companies must be informed and prepared to address these new demands.

The retreat brings together lawyers, bankers and other deal professionals to lead workshops on the leading practices of highly successful offerings.