Boom in Asian IPOs fails to make up for slow markets in US and Europe, EY says
The global IPO market grew slightly in the first half of the year in terms of deals, while total capital raised fell, primarily as a slowdown in the US market more than countered an Asian boom, according to a study by EY.
The number of IPOs worldwide increased to 631 in the first half of the year while total capital raised declined 13 percent to $103.7 bn, EY says. In the second quarter, IPOs rose 37 percent by number of offerings from the first quarter and increased 61 percent in terms of total capital raised.
The US market is the main factor weighing down the global IPO market in the first half, with offerings dropping 36 percent to 101 IPOs and falling 45 percent by proceeds raised to $19.7 bn. EY says the US slowdown stems in part from companies seeking alternative modes of financing.
‘Despite the cooling market, we do not believe the pattern of IPO activity in 2015 reflects a widespread lack of confidence among dealmakers,’ says Maria Pinelli, EY’s global vice chair of strategic growth markets, in a press release. ‘Instead, it reflects an ongoing pause for breath while entrepreneurs and managers evaluate the broad range of funding options available.’
IPOs in Asia-Pacific, meanwhile, surged 66 percent to 355 offerings and grew 48 percent in terms of capital raised to $48.4 bn in the first half of this year compared with the same period in 2014, EY says. China is responsible for the gain, with 239 IPOs that raised a combined $40 bn, up 132 percent by deal number and 141 percent by proceeds from the first half of 2014.
‘Strong capital markets and positive market sentiment are driving activity in Greater China and, as new regulations open up China’s markets, we expect the number of IPOs to reach an all-time high by the end of the year,’ Pinelli says. ‘With Japan also on course to see a record number of new listings in 2015 and momentum building on ASEAN exchanges, the breadth of investment opportunities in Asia-Pacific is unprecedented.’
In the Europe, Middle East, India & Africa region, IPO activity fell 29 percent by proceeds and 24 percent by number of deals, with 165 IPOs raising a total of $34.7 bn. Tensions with Russia and the uncertainty of Greece’s economy are the major factors dragging down the IPO market in Europe, EY says.
