LONDON, June 25, 2019 /PRNewswire/ -- The trend of
unicorn IPOs coming to market and pushing their proceeds to
historic levels continued in Q2 2019 despite ongoing geopolitical
uncertainty and trade tensions, resulting in 507 IPOs in H1 2019,
raising total proceeds of US$71.9b.
While deal numbers were down 28% from H1 2018, first-day returns on
the main markets were up 15.4% on average and post-IPO performance
increased 28.4%. Technology, health care and industrials saw the
largest share of IPOs in H1 2019, together accounting for 266 IPOs
(52% of global IPOs by deal numbers) and raising US$47.8b altogether (66% of global proceeds). By
proceeds, technology was the strongest sector with US$29.3b raised (41% of global proceeds). These
and other findings were published today in the EY quarterly report,
Global IPO trends: Q2 2019.
Dr. Martin Steinbach, EY Global
and EY EMEIA IPO Leader, says:
"Following the trend of increased unicorn IPO activity, Q2 2019
welcomed a number of much-anticipated, high-profile unicorns. The
global IPO activity slowdown continued following an unusually quiet
Q1 2019 as ongoing geopolitical tensions, trade issues among the
US, China and the EU, Brexit and
the outcome of European elections dampened IPO sentiment. The main
way for issuers to navigate the shift from old to new realities in
unpredictable markets is to remain flexible. So well-prepared
companies, with the right equity story, will find their windows of
opportunity. We expect higher IPO activity in the second half of
2019."
Americas IPO markets rebound
On a quarterly basis the Americas saw 87 IPOs that raised
$28.1b in Q2 2019, representing an
increase of 5% by deal numbers and rise of 50% by proceeds from Q2
2018. However, YTD 2019 activity was down 14% with 118 deals, and
proceeds fell by 12% to US$33.6b,
compared with YTD 2018.
Despite this, the NYSE and NASDAQ ranked first and second
respectively by proceeds globally in H1 2019. US exchanges
accounted for 75% of Americas IPOs by number of deals (88 IPOs) and
96% by proceeds (US$32.2b) in H1
2019, driven by several high-profile technology unicorns that went
public during Q2 2019.
Jackie Kelley, EY Americas IPO
Leader, says:
"Finally, a wave of much-anticipated, household name unicorns
entered the US IPO market, reigniting IPO activity and sparking an
increase in constructive investor sentiment. The majority of IPOs
delivered positive post-IPO returns in the quarter, especially
high-growth companies, which sets the stage for continued momentum
in IPO activity."
Asia-Pacific IPO plans accelerated to get ahead of economic
headwinds
Ongoing trade tensions between China and the US continued to impact IPO
activity in YTD 2019, inhibiting a return to 2018 levels. IPO
activity across the Asia-Pacific
region in YTD 2019 was down 12% by volume (266 IPOs) and 27% by
proceeds (US$22.3b), compared with
YTD 2018.
However, Asia-Pacific continued
to dominate global IPO activity YTD 2019, by volumes, representing
six of the top ten exchanges. By proceeds, the region accounted for
three of the top ten exchanges. Asia-Pacific's main markets experienced
average first-day returns of around 19% and average current returns
of 34%, illustrating that IPO performance continues to elevate IPO
investor sentiment.
Mainland China exchanges saw
27% more IPOs (33 IPOs) in Q2 2019 compared with Q2 2018, but a 38%
decline in funds raised (US$5.1b) due
to a lack of mega IPOs. However, Mainland China IPO activity is
expected to improve during H2 2019 following the launch of the
Sci-Tech innovation board (STAR Market) on the Shanghai Stock
Exchange.
Japan's IPO markets remained
stable in YTD 2019, posting a slight increase in deal numbers
compared with YTD 2018. There were 41 IPOs in YTD 2019 versus 39
IPOs in YTD 2018 while proceeds (US$1.3b) were notably lower than YTD 2018
(US$2.8b).
Ringo Choi, EY Asia-Pacific IPO
Leader, says:
"While ongoing trade issues between the US and China continued to have an effect on investor
sentiment across Asia-Pacific, the
prospect of a potential economic downturn had many companies
accelerating their IPO plans. As IPO candidates race to get ahead
of economic headwinds, and as average post-IPO performance remains
positive, we expect Asia-Pacific IPO activity levels to rise in the
second half of 2019."
EMEIA continue to proceed cautiously within persistent
geopolitical uncertainties
In EMEIA, deal volumes and proceeds were down from YTD 2018 with
EMEIA exchanges posting 123 IPOs (a decline of 53%) and raising a
total of US$16.0b (also a decline of
48%). Despite these challenges, EMEIA accounted for five of the top
ten exchanges globally by proceeds and two by deal numbers.
Overall, due to strong first-day returns and YTD IPO performance
and investor confidence, EMEIA IPO markets are expected to gain
momentum in the second half of 2019.
Europe experienced a notable
increase in IPO activity in Q2 2019, with volumes up 100% (48
deals) and proceeds up a significant 3,338% (US$12.5b) from Q1 2019.
Both domestic and cross-border activity also gathered steam in
the UK in Q2 2019 as 11 companies went public, representing
proceeds of US$4.5b.
Steinbach says:
"EMEIA is a region that is more dependent than others on global
trade, and therefore, more sensitive to persistent geopolitical
uncertainties. Given that the largest trades flows in the world are
between the US as well as China
with the European Union, EMEIA serves as a bellwether in
determining global economic health. If the US and China can resolve their trade and tariff
issues, and if the UK and the EU can agree on terms for an orderly
Brexit, we can expect IPO activity to rebound in the second half of
2019. In the meantime, EMEIA IPO candidates continue to prepare so
that they are ready to leap when the timing is right."
Notes to Editors
About EY
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years, we've helped many of the world's most dynamic and ambitious
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About the data
The data presented in the Global IPO trends: Q2 2019
report and press release is from Dealogic and EY teams. Q2 2019
(i.e., January-June) and 2019 (January-June) is based on priced
IPOs as of 20 June 2019 and expected
IPOs in June. Data is up to 20 June
2019, 9 a.m. UK time. All data
contained in this document is sourced to Dealogic, CB Insights,
Crunchbase and EY unless otherwise noted.
Appendix: January 2019 to
June 2019 global IPOs by
sector
Sectors
|
Number
of IPOs
|
Percentage
of global
IPOs
|
Proceeds
(US$m)
|
Percentage of
global capital
raised
|
Consumer products and
services
|
37
|
7.3%
|
$3,177
|
4.4%
|
Consumer
staples
|
27
|
5.3%
|
$1,817
|
2.5%
|
Energy
|
19
|
3.7%
|
$3,436
|
4.8%
|
Financials
|
24
|
4.7%
|
$3,913
|
5.4%
|
Healthcare
|
91
|
17.9%
|
$12,064
|
16.8%
|
Technology
|
114
|
22.5%
|
$29,274
|
40.7%
|
Industrials
|
61
|
12.0%
|
$6,464
|
9.0%
|
Materials
|
50
|
9.9%
|
$2,507
|
3.5%
|
Media and
entertainment
|
27
|
5.3%
|
$1,786
|
2.5%
|
Real
estate
|
27
|
5.3%
|
$4,268
|
5.9%
|
Retail
|
23
|
4.5%
|
$2,009
|
2.8%
|
Telecommunications
|
7
|
1.4%
|
$1,184
|
1.6%
|
Global
total
|
507
|
100%
|
$71,900
|
100%
|
Source: Dealogic,
EY
|
Alan Duerden
EY Global Media Relations
+44 (0) 207 951 8993
aduerden1@uk.ey.com
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SOURCE EY