European stock exchanges, led by London, saw Initial Public Offering (IPO) activity rise for the fifth quarter in a row during the April to June period, amid signs of a modest recovery in investor interest in primary listings, according to the latest IPO Watch Europe, the PricewaterhouseCoopers survey tracking the volume and value of IPOs around Europe. However, the total value of European IPOs in the last quarter was still way behind the figures recorded in the boom years prior to the economic crisis and considerably lagged the highly successful Greater China markets. The US markets in turn were weaker than Europe in both number and value of IPOs.

There were 89 IPOs on European exchanges in the second quarter (Q2) of 2010 with an offering value of €9,014m, compared with 79 listings that raised €4,716m in the first quarter (Q1). Both quarters showed a huge improvement over Q2 2009 when the combined value of European IPOs was just €455m.

London again led Europe in both volume and value with 27 IPOs raising €3,202m in the quarter, up from 24 IPOs that raised €2,102m in the previous quarter. London accounted for 36% by value and 30% by number of all European IPOs.

Close on London’s heels came the Warsaw Stock Exchange with 25 listings raising €3,150m, a huge increase on the 15 IPOs that raised just €31m in Q1. This was largely due to two privatisation listings – insurance group PZU and utilities company Tauron Polska Energia - which together raised more than €3,000m and were two of the biggest IPOs of the quarter. The other major IPOs were Essar Energy and Fidelity China Special Situations which raised respectively €1,485m and €526m in London and Amadeus which raised €1,317m on the Spanish exchanges BME.

Richard Weaver, partner, Capital Markets Group, PricewaterhouseCoopers LLP, commented:

“While investor enthusiasm remains muted in Europe, there have been four €1billion-plus IPOs during the quarter, something we have not seen for more than two years. This has helped double the value of transactions over the previous quarter despite volumes being relatively static. London, which saw some significant domestic IPOs get away this quarter, also retains its international appeal, particularly for oil and gas and natural resources companies, as shown for example by the float of India’s Essar Energy. “

After London and Warsaw, the Spanish exchanges BME recorded the next largest value of IPOs with Amadeus accounting for €1,317m of the €1,331m raised, compared with just €15m raised from two IPOs in Q1. The fourth largest market by IPO value was NASDAQ OMX which saw five listings raise €641m compared with six that raised just €99m in Q1.

Both NYSE Euronext and Deutsche Börse suffered significant falls in the value of the IPOs they hosted compared to last quarter. NYSE Euronext saw 10 listings raising only €56m compared to eight raising €303m in Q1, while the German exchange had only two listings last quarter raising €5m, well down on the eight listings with a total value of €1,745m in Q1.

Elsewhere in Europe, Oslo Børs and Oslo Axess saw five IPOs with a combined value of €331m, up on Q1 when it hosted four IPOs which together raised €142m and a vast improvement on Q2 in 2009 when it saw no IPOs. Luxembourg hosted 10 IPOs worth €183m, down from 11 in Q1 which raised €241m. SIX, the Swiss Exchange, saw two IPOs raising €115m after a barren first quarter. The Wiener Börse had no IPOs in Q2.

The volume of IPOs on the US exchanges rose to 39 (27 in Q1) with an offering value of €3,968m (€2,968m in Q1). It is the second time since the fourth quarter of 2008 that the offering value of IPOs in Europe has exceeded those on the US exchanges.

Richard Weaver, partner, Capital Markets Group, PricewaterhouseCoopers LLP, added:

“While we have not yet seen a strong recovery in the European IPO market, we have seen some notably successful IPOs such as Jupiter and Essar, together with Ocado, on its roadshow valued at £1 billion. In China the impending completion of Agbank, set to be close to the biggest ever IPO, is another indicator of the global markets continuing to welcome attractive offerings. While investor sentiment remains positive, particularly in certain sectors, extreme market volatility is still creating pricing uncertainty and threats to a successful IPO completion.

“Companies gearing up for a potential IPO in the second half of the year will be hoping that, with the traditionally quiet holiday period coming up, the next few months will see some stability return to London and other European markets and produce a more conducive environment for IPOs in the fourth quarter.“