Global IPO Volumes, Value Slide

Tom Burroughes

29 June 2020

Global initial public offerings, which are important drivers of new high net worth individuals, slumped by 67 per cent in value terms during April and May this year compared with the same months in 2019. The COVID-19 pandemic and lockdowns accounted for the slide, figures from EY, the consultancy and professional services firm, said.

In volume terms, IPOs fell by 48 per cent on a year ago. Total proceeds were $13.2 billion. In the first half of this year, there were 419 deals, and proceeds of $69.5 billion, falling by 19 per cent and 8 per cent respectively, from the year-to-date period in 2019.

Despite a late flurry of deals in June, global IPO activity was sluggish on Americas and EMEIA stock exchanges year-to-date, while Asia-Pacific IPO activity increased. Americas deal volume and proceeds both fell by 30 per cent compared with year-to-date 2019, while EMEIA IPO deal volume and proceeds fell by 50 per cent and 44 per cent, respectively. Asia-Pacific IPO activity rose 2 per cent by deal numbers and rose 56 per cent by proceeds compared with year-to-date 2019.

The technology, industrials and healthcare sectors dominated in year-to-date 2020. Technology saw 87 IPOs raise $17.2 billion, industrials saw 83 IPOs raise $9.6 billion and healthcare had 76 IPOs which raised $15.9 billion.

Americas
US exchanges still accounted for the majority of IPOs in the Americas in the first half of 2020, with 79 per cent by deal volume and 91 per cent by proceeds ; this included five “unicorn” IPOs. The healthcare and technology sectors continued to have the highest level of IPO activity in the US in year-to-date 2020, representing 55 per cent and 25 per cent by deal volume, respectively. The healthcare sector dominated in proceeds , contributing 46 per cent, from 35 IPOs.

"With stock prices rebounding and market sentiment improving, we are seeing signs of recovery in the IPO market. Over a third of the IPOs in the first half of 2020 occurred in June. IPO pipeline continues to build as issuers look to go public in the second half of 2020 or early 2021," Jackie Kelley, EY Americas IPO leader, said.

Asia-Pacific
Although year-on-year 2020 IPO activity in Asia-Pacific rose by deal number and proceeds , Q2 2020 saw a decline of 18 per cent compared with Q2 2019 by deal number, while proceeds rose by 28 per cent.

Asia-Pacific exchanges accounted for four of the top five exchanges by deal volume and three of the top exchanges by proceeds. Globally, by proceeds, NASDAQ led year-to-date 2020, followed by the Shanghai Stock Exchange and Hong Kong Stock Exchange. By deal volume, Shanghai, Hong Kong and NASDAQ markets led the way.

In Greater China, IPO activity was up 29 per cent by volume and 72 per cent by proceeds year-to-date 2020 compared with year-to-date 2019. In Japan, IPO volume fell by 17 per cent year-to-date 2020, while proceeds dropped by 53 per cent. Australia and New Zealand IPO activity was also down year-to-date - 41 per cent by volume and 82 per cent by proceeds.