The Global Initial Public Offerings

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It is reported that after the biggest gain of any industry in 2010, global initial public offerings by mining and basic material companies may reach a record next year, as China and India drive up metal prices and attract investors.

As it can be seen from the news that mining, chemical, and heavy industry IPOs jumped to $ 30.3 billion this year, according to data compiled by Bloomberg. Miners made up 13 of the top 20 issues in the sector as IPOs across all groups more than doubled to $ 280 billion.

An analyst predict that share sales by miners in 2011 will likely rival 2007, Tim Goldsmith, PricewaterhouseCoopers LLP’s global mining leader.

Goldsmith said “There’s a lot of money searching for a home, “whose team advises mining companies. “It’s all about those who believe in the growth story in China and India.”

Prasad Patkar said that “There has been an opening of the floodgates in IPOs after a prolonged period of high commodity prices, “who helps manage about $ 1.8 billion at Platypus Asset Management Ltd in Sydney, and studies IPOs. “We look at the quality of the asset, what commodity it is, where does it sit on the cost curve, what is the execution risk and the valuation.”

It is reported that Morgan Stanley kept its spot from 2009 as number one underwriter across all IPOs this year, with 11.2 percent of the market and 101 issues. JPMorgan Chase &Co moved to second from fifth last year.

Citigroup Inc raised its metal price forecasts by as much as 20 percent for 2011 and 2012. Copper, coking coal and iron ore will be the “big winners” because of supply constraints, Citigroup analyst Alan Heap said in a Nov 8 report.

That’s on the back of a more-than-doubling in the London Metal Exchange Index, a measure of six metals including copper and nickel, to 4134 from 1614 in December 2008, the lowest since June 2004.

Still, mining IPOs “are high risk, high reward. Some are not for the faint-hearted and people should invest in them understanding the high risk,” Goldsmith said.

Aphrodite Gold Ltd, a Perth-based explorer, is the worst performing mining IPO this year, falling 45 percent from its offer price. It raised $ 6.9 million in July. The second worst is Solid Gold Resources Corp, based in Thornhill, Ontario. The mineral exploration company has declined 43 percent.

Emerging markets in the Asia-Pacific region had the strongest growth in basic materials IPOs in 2010, with $ 16.56 billion raised, compared with $ 809.91 million last year.

China’s demand for some metals, including iron ore, may double by 2020, Rio Tinto’s Chief Executive Tom Albanese told his investors in London on Nov 29. China will build 10 cities larger than New York by 2025 and needs to import more steel, iron ore, coal, aluminum and copper, according to Rio forecasts.

“Investors believe that commodity prices are going to go higher, demand is going to remain strong and as a result they are prepared to back new players in the sector,” said Gavin Wendt, a senior resources analyst at Mine Life Pty in Sydney.

“What we are seeing is a near record number of IPOs which means there is a lot of appetite for risk, there is a lot of appetite for resource investing.” {youtube|100|campaign}