The afternoon deal

December 29, 2009

JORDAN/Clarity is in short supply today when it comes to IPOs.  Two companies filed for inital public offerings worth $100 million and $300 million on Monday, underscoring an impression of  investors growing more comfortable with companies they may have deemed too risky in 2009.

Following the upbeat tone is aluminum giant UC RUSAL securing some heavy-weight  investors –a member of the Rothschild family as well as one of southeast Asia’s richest men– in an IPO now bumped up in value to possibly $27 billion.

But wait, not all is rosy. A top China train maker, CNR, limped in its market debut after its $2 billion IPO in Shanghai. Valued at 49 times its 2008 earnings, investors tolerance was tested and the stock closed up a weaker-than-expected 2.34 percent.

“The weak debut is actually good for the market as it sends a warning for future IPOs, forcing companies to think twice before they set sky-high IPO prices,” said Chen Huiqin, senior stock analyst at Huatai Securities in Nanjing.

Looking into 2010 as we are all want to do this week, healthcare IPO’s will be a risky and potentially hot area boosted by President Barack Obama’s healthcare reform bill. The trend in Chinese Internet firm spin offs may continue. Tencent Holdings (0700.HK),  , China’s largest Internet firm, (NTES.O) China’s third-largest online games operator and Chinese software developer Kingsoft (3888.HK) could be prime candidates to spin-off some business units, analysts say.

The global market for IPO’s looks hot in 2010 but, then again, maybe all the talk will add up to hot air. What are your thoughts?

Further reading:

The Top Ten IPO Candidates For 2010 (TechCrunch)

Mexico promotes bourse, but IPOs still scarce

Here Comes a Cleantech IPO Parade (Daily Finance)

Codexis Files for IPO, Again (earth2tech)


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