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EY finds IPO activity plummets in Q1

EY finds IPO activity plummets in Q1

Initial public offering activity on the ASX dropped by 30 per cent in the first quarter of 2018, mirroring a drop in global IPO deal numbers amid geopolitical uncertainties and market volatility.

Professional Development Jotham Lian 09 April 2018

EY’s Global IPO survey showed that there were 19 IPOs on the ASX in Q1 2018, raising US$112 million, declines of 30 per cent and 33 per cent respectively compared with Q1 2017. 

The ASX was the fourth most active exchange in Q1 2018 by volume, with a 6.6 per cent share of global deal numbers, behind the Hong Kong, Mumbai and NASDAQ exchanges.

“The Australian IPO market continued to see vigorous IPO activity from the mining and metals sector in Q1 2018, however large-cap IPOs look set to remain rare as capital market investors continue to be selective and demand from alternate sources of capital remains strong,” said EY Oceania IPO leader, Gavin Sultana.

On the global front, year-over-year volume dipped by 27 per cent with 287 listings in Q1 but managed to raise US$42.8 billion, a 28 per cent increase from Q1 2017.

“Global growth in IPO proceeds outpaced deal numbers in a relatively strong first quarter. Driven by larger transactions, global IPO activity started out with a strong increase in proceeds in what is traditionally the slowest quarter of the year, despite a decline in deal numbers,” said EY Global and EMEIA IPO leader Dr Martin Steinbach.

“However, market volatility in February did slightly dampen investor confidence, slowing momentum gained from calendar year 2017, the highest performing 12-month period since 2007.

“Looking ahead, the outlook remains positive in many markets around the world and we expect to continue to see IPOs from a range of sources including large tech, high growth, cross-border listings, carve-outs and state-owned enterprises.”

Asia-Pacific markets saw the lowest quarterly total since Q2 2016, with 157 IPOs accounting for a 39 per cent drop compared to Q1 2017. Total proceeds this quarter stood at US$11.4 billion, down 26 per cent compared to Q1 2017 and the lowest level since Q1 2016.

Despite the downward trend across the globe, the Americas IPO activity saw 44 IPOs in Q1 2018 raising US$15.4 billion, an increase of 29 per cent in terms of volume and 22 per cent by proceeds compared to Q1 last year.

US IPO activity accounted for 36 IPOs raising US$12.8 billion, up 44 per cent in terms of volume and 17 per cent by proceeds compared with Q1 2017.

Additionally, five of the top 10 global deals were featured in the US, with US exchanges accounting for 41 per cent of all global cross-border activity in Q1 2018 compared to 35 per cent in Q1 2017.

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EY finds IPO activity plummets in Q1
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