"It's a drop in the equity markets' bucket but it is encouraging that people are buying these IPOs," said Mark Hantho, global head of equity capital markets at Deutsche Bank.

Follow-Ons Surge

That surge in follow-ons portends a strong IPO rebound, bankers said, because it reflects a return of risk appetite.

The quarter saw companies worldwide raise new shares primarily to repair balance sheets, and in the case of US banks, to pass the government "stress tests," though Carnoy said she expects more issuance to be for funding growth now that many firms, banks in particular, have recapitalized.

In the United States, companies raised $89 billion in secondary offerings, including a record $45 billion in May alone, bringing volume up 54 per cent so far in 2009 over the year-ago figures. Globally, they are up 16 per cent.

Major deals in the second quarter include a $19.4 billion follow-on by UK-based bank HSBC Holdings PLC and a $5.75 billion offering by Goldman Sachs Group Inc.

Outlook

The strength of the recent IPOs -- in the United States, no IPO this year has fallen in its first day of trading -- will stir the deal pipeline later this year, bankers predicted.

"This market strength is prompting issuers to get ready so that in the third and fourth quarters you'll see these numbers increase," said John Chirico, co-head of capital markets origination for the Americas at Citi.

"It's been a small group so far but the market gave them a fair hearing," Chirico said.

... contd.