Global IPO Activity Is Sinking
But EY predicts acceleration in IPOs for the rest of 2015 amid ‘solid' fundamentals
Global IPO activity has slowed in the first quarter compared with the same period a year earlier, led primarily by a slowdown in new listings in the US, according to a study by EY.
A slump in US IPOs has placed the country behind both Asia-Pacific and the Europe, Middle East, India and Africa (EMEIA) region in terms of new listings activity, the report finds.
The first three months of the year saw a worldwide total of 252 IPOs that raised a combined total of $38.2 billion, a decrease of 4 percent in volume and 19 percent by proceeds when compared with the first quarter of 2014, according to EY. The figure also represents a decrease of 31 percent by number of deals and a drop of 47 percent by capital raised from the fourth quarter of last year.
"After a strong finish to 2014, a dip in the overall level of IPO activity was anticipated,'"writes Maria Pinelli, global vice chair of strategic growth markets at EY, in the report. "But a notable feature of the first quarter was the slower pace of IPOs in the US, which was outperformed by both Asia-Pacific and EMEIA in terms of deal numbers and capital raised."
The US registered 38 IPOs that raised a combined $5.6 billion in the first quarter, down from 71 deals raising $12 billion in the same period last year, EY says. At the same time, the Asia-Pacific region led the global market in terms of number of deals, with 145 IPOs raising $15.8 billion. The EMEIA region took the lead in terms of proceeds, with 67 IPOs raising $16.8 billion.
Despite a reported global slowdown in the first quarter, Pinelli expects IPO activity to pick up for the remainder of the year. "We are encouraged that valuations have been robust and market fundamentals solid, with most indices coming close to or exceeding levels not seen since 2007," she adds.
"Furthermore, the healthy global IPO pipeline means we expect activity to pick up strongly as the year progresses."
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