A trio of Chinese initial public offerings will test US public markets next week as will three natural gas and oil exploration companies. Some 17 companies are expected to launch IPOs on either NYSE Euronext's New York Stock Exchange or on Nasdaq next week, according to data tracker Dealogic.
The surge in IPO activity sets the stage for a robust November, typically a busy month for US initial public offerings - $8.2 billion was generated by new issues this time a year ago.
There has not been this much activity in the IPO market since December 2006 when 17 new offerings were launched. The new issues could raise up to $2.9 billion, based on the high end of forecasts disclosed in registration filings with the US Securities and Exchange Commission.
But market conditions will dictate how many IPOs are successful. "The market may take out the marginal ones," said Francis Gaskins, president of research firm IPOdesktop.com. "Those that have good income statements, there will always be a market for them."
More than 120 companies are in the IPO pipeline and could generate proceeds of $25.7 billion. The value of this year's IPOs could swamp 2006's results, when new offerings generated about $45 billion. Much of the buoyancy in the sector in recent weeks has come from Chinese issues, with strong debuts for most of the 21 listings.
Next week an offering by China's AirMedia Group Inc, expected on Nasdaq, could raise up to $165 million. The company operates a digital media network dedicated to air travel advertising.
China's Agria Corp, an agricultural company currently offering corn seeds, seedlings and sheep breeding products, plans to raise up to $283 million, with an IPO on the NYSE. And China's largest retail drug store, China Nepster Chain Drugstore, also plans to sell its shares in a US IPO expected to raise up to $278 million.
"All of next week's are in growing markets, all are profitable, and proceeds are pretty much going to fuel growth," said IPOdesktop's Gaskins. "There is nothing mysterious about these."
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