(Newsroom America) -- Despite a marked moderation in mid-quarter IPO activity, the continued strength in the equities markets, a healthy registration pipeline, a decrease in market volatility and the second largest U.S. IPO of 2012 are all expected to support increased IPO momentum into the fourth quarter, according to PwC US's "IPO Watch".
The quarter finished strongly with eight IPOs pricing in the last two weeks of September, including the quarter's largest IPO of Banco Santander's Mexican unit dual listing $4 billion IPO on September 25, which raised $2.9 billion in the U.S. markets.
There were 29 U.S. IPOs in the third quarter of 2012, compared to 31 IPOs in the second quarter of 2012, and 21 IPOs in the third quarter of 2011.
Total proceeds raised in the third quarter were $6.6 billion, compared to $21.8 billion in the second quarter of 2012 (which included the $16 billion Facebook IPO), and $3.2 billion in the third quarter of 2011.
During the third quarter of 2012, the financial and the technology sectors, which had eight IPOs each, were the leading sectors with 58 percent and 13 percent of the proceeds, respectively.
Financial sponsors continued their history of strong presence in the IPO market, backing 69 percent of IPOs in the third quarter of 2012, generating 43 percent of total proceeds.
On a year-to-date basis, 104 companies have completed their IPOs, raising total proceeds of $34.1 billion, compared with 106 companies that had completed their IPOs in the first three quarters of 2011 raising $29.1 billion.
"The IPO market continued to demonstrate discrete periods of activity in the third quarter, reflecting the continued compression of IPO windows of opportunity," said Henri Leveque, leader of PwC's U.S. Capital Markets and Accounting Advisory Services.
"The markets started well in July, became fairly muted in August, and showed a substantial pickup in activity in September to close out the quarter. As volatility decreased and the equity markets climbed to levels not seen since 2007, we've seen well-prepared companies able to execute on their IPO plans."
IPOs continued to outperform as a sector in the third quarter, with stock price gains handily exceeding the broader equity markets returns.
On a quarter-to-date basis, all 29 IPOs are, on average, 26 percent above their issue price, again strongly outperforming the S&P500 which showed a third quarter gain of approximately 5.8 percent. Also, all 29 IPOs, when combined, increased their price by an average of 10 percent on their first day of trading and averaged a return of 13 percent after one week.
During the third quarter of 2012, 38 companies entered the SEC public IPO registration process, exceeding the 32 companies that filed in the second quarter of 2012. The LTM (last twelve months) SEC IPO pipeline had 95 companies seeking to raise $19 billion.
The pipeline was led by the financial and energy sectors, followed closely by the technology and consumer sectors. Combined, they accounted for 55 percent of the total proceeds being sought. According to PwC, the actual pipeline is likely to be higher due to the Confidential Filing provisions provided by the JOBS Act - Emerging Growth Companies (EGC's) are only required to publicly disclose their filings within 21 days of their anticipated IPO roadshow.