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Survey predicts spike in IPO activity through year's end

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The market for initial public offerings will continue growing in the second half of 2013, according to a consulting and accounting firm with New Jersey offices.

BDO USA LLP said 64 percent of capital markets executives expect IPO activity to increase in the year's final six months, based on the firm's new survey. Less than a third believe IPO activity will remain flat, while 6 percent predict a decline.

Overall, capital market executives are predicting a 7.7 percent increase in the number of IPOs in the second half of 2013, compared to the first half of this year. The projected average size of each IPO is $265 million, which would result in about $46 billion in total IPO proceeds on U.S. exchanges in 2013.

Mark Giamo, managing partner of BDO's Woodbridge office, said prior surveys showed optimism that wasn't backed by results. But Giamo said the IPO market and broader stock rallies since January show things have turned a corner, adding to momentum.

"This time, the first six months, activity has been strong. That's increasing optimism," Giamo said. "Plus the market has been strong. That's increasing confidence.

Most investment bankers attributed the increase in IPO activity to previous postponement of prior offerings, general economic improvement and low interest rates, which are creating demand from investors for higher yielding assets.

"The number of offerings is significantly up, and if you exclude last year's Facebook IPO, total proceeds generated on U.S. exchanges have jumped close to 50 percent from a year ago," Lee Graul, a partner in the capital markets practice at BDO USA, said in a statement.

Among industries, technology ranked first among investment bankers as the source of new IPOs, with 75 percent saying they expect that sector to increase public offerings.

"I like that technology jumps out," Giamo said. "That's a good sign. We have a good, strong technology presence in New Jersey."

Ranking next was energy and natural resources, followed by health care, real estate, biotech, financial services, industrial and manufacturing, media and telecommunications, and consumer and retail.

Reporter Tom Zanki is @BizTZanki on Twitter.

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Write to the Editorial Department at editorial@njbiz.com

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