This year will see continued softness in the US IPO market, according to a new survey of American transaction attorneys conducted by KCSA Strategic Communications. The survey found that 92 percent of securities attorneys think the IPO market in 2012 will be relatively flat compared with 2011, and 93 percent believe the most anticipated IPO in 2012 will be Facebook.

At the same time, many of the attorneys expressed concerns that the IPO market may be experiencing a social media bubble: 72 percent named Groupon as the most anticipated IPO of 2011 and 85 percent noted the Groupon offering as the most over-hyped IPO this year. Zynga and Linkedin were the only other offerings mentioned.

According to Jeff Corbin, chief executive officer of KCSA: ”Although companies such as Groupon, LinkedIn and Zynga have dominated the headlines, we have seen investor appetite, especially for IPOs, gravitate toward companies that operate within more mature, proven industries. As a result of the market uncertainty we’ve experience over the past three to four years and based on the results of the survey, we suspect that both institutional and individual investors are looking for a respite from market turbulence and a return to predictability.”

According to 84 percent of those surveyed, there is still strong demand for foreign companies to access US capital markets and list on the major US exchanges.

“Many foreign companies still view the US capital markets as the holy grail in terms of listing, both in terms of perception as well as liquidity,” says Colin Diamond, partner of White & Case. “Indeed, foreign technology companies, particularly in Europe and the Commonwealth of Independent States, are concluding that the US capital markets are the only location where their value will be appropriately reflected.”

But another key survey finding was that there was a 22 percent drop off in positive sentiment toward Chinese-based company issuances. Concerns about corporate governance issues arose as 78 percent of respondents named China as a continuing strong driver of US-based IPO issuance in 2012 versus 100 percent in the 2011 survey.

The attorneys surveyed expect increased IPO issuance from other foreign countries. When asked which foreign countries and regions will drive global IPO issuance, 18 percent of respondents named Israel, 16 percent said India and 11 percent said Brazil and Europe.

Private Equity backed companies are also expected to dominate the IPO landscape in 2012, according to 84 percent of attorneys surveyed.