Investors look to 2018 for increased growth as the IPO market returns to pre-crisis level highs in 2017

Wednesday, 20 December 2017

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  • By deal number, 2017 is the most active year for global IPOs since 2007 
  • IPO activity in all regions up double digits; 101 IPOs in Australia – up from 81 in 2016 but proceeds raised are down
  • 2018 outlook: Global IPO activity levels expected to rise with a busy year ahead and mega deals on the horizon

Global IPO activity surged in 2017, making it the most active year since 2007. Year-to-date, 2017 has registered 1,624 IPOs with US$188.8b raised – an increase of 49% by number of deals and 40% by capital raised compared with 2016. But while these figures do not equal 2007 levels (1,974 IPOs, which raised US$338.4b), investors are anticipating a very active 2018 as markets return to their pre-crisis levels. These and other findings were released in the latest EY Global IPO trends: Q4 2017.

Dr. Martin Steinbach, EY Global IPO Leader, says:

“2017 will close with more IPOs than any year since 2007. With this great momentum, IPO candidates are lining up for 2018. The outlook appears bright, driven by lower volatility across regions, high valuation levels and a renewed appetite for cross-border IPOs, particularly in the US, Hong Kong and London. A healthy global pipeline across a broad range of sectors and markets suggests IPO activity levels will be up with more megadeals, thereby increasing the global proceeds in 2018.”

In Australia, there were 101 IPOs in 2017 up from 81 in 2016 (an increase in volume of almost 20%), however the proceeds for 2017 totalled US$2.3b down from US$5.1b in 2016 – a drop of 56%. 

Gavin Sultana, EY Oceania IPO Leader, says:

“The trend towards small-cap IPOs was a feature of 2017 and we expect that this segment of the market will remain strong into 2018 driven by activity in the technology and materials sectors.  IPO proceeds were significantly down in 2017, reflecting the combination of strong demand from alternate sources of capital and a cautious approach from investors.  Whilst we do expect average IPO proceeds to increase in 2018, strong demand from alternate sources of capital is likely to continue to restrict volumes at the top end of the market.”

2018 outlook: A busy year ahead with mega deals on the horizon

As the year comes to a close, a healthy pipeline of market-ready companies is growing as a result of lower volatility across regions, equity indices still hitting all-time highs and increasing investor confidence. Cross-border deals look set to remain a feature of the global IPO market in 2018, especially with exchanges in US, Greater China and London. This trend will help to support next year’s anticipated listing of the world’s largest oil company with more state-owned enterprise IPOs expected to follow across the Middle East and North Africa.

Steinbach says: “Everything is in place for an exceptional 2018. The stronger-than-expected turnaround in economic activity in the Eurozone has boosted expectations for global economic growth. All the major engines of growth in the global economy are now synchronized in an upward trajectory for the first time since the end of the global financial crisis.”

- Ends -

About the data

Analysis in this press release includes all deals listed up to 1 December and EY’s expectation of deals that will close in the rest of the month. Data has been sourced from Dealogic as of 1 December 2017. IPO activity from January 2017 through December 2017 is based on priced IPOs as of 1 December and expected IPOs by the end of December.

EY - Appendix: 2008 - 17 Global IPO activity

Appendix: January 2017 to December 2017 global IPOs by sector

Sector

Number of IPOs

Percentage of global IPOs

Proceeds (US$m)

Percentage of global capital raised

Consumer products and services

198

12.2

12,930

6.8

Consumer staples

91

5.6

7,203

3.8

Energy

105

6.5

21,261

11.3

Financials

90

5.5

31,838

16.9

Health care

155

9.5

13,812

7.3

Technology

250

15.4

30,925

16.4

Industrials

307

18.9

26,937

14.3

Materials

184

11.3

11,109

5.9

Media and entertainment

58

3.6

5,392

2.9

Real estate

77

4.7

14,100

7.5

Retail

75

4.6

9,004

4.8

Telecommunications

34

2.1

4,268

2.3

Global total

1,624

100.0

188,780

100.0

Notes to Editors

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