Global IPO activity up despite heightened investor caution

  • Partagez
  • IPO volume and proceeds worldwide both up more than 60% on first half of 2013
  • Europe resurgent to take top spot by capital raised; US exchanges post their strongest first half in over a decade
  • First-day returns down in Q2 as investors focus keenly on pricing
EY Global IPO Trends 2014 Q2 PDF

PARIS, 25 June 2014. The global IPO market continued its recovery to end the first half of the year strongly, according to EY Global IPO Trends: 2014 Q2. There were a total of 588 deals raising around US$117.7b in the first six months of the year, an increase of 60% and 67% respectively on the same period in 2013 and the highest amount of capital raised in the first half since 2007. In Q214, there were 333 IPOs raising US$70.7b, a 30.6% increase on the previous quarter and a rise of 62.4% compared to Q213 by deal numbers.

There was a fall in first-day returns – or the so called “pop” – in Q214 compared to the previous quarter. Average returns in the US fell from 12.3% to 9.8%, the UK fell from 8.1% to 3.0% and Hong Kong fell from 2.1% to -0.6%. However, IPO stocks in Q214 are still outperforming the broader equity markets in many places.

Activity was spread broadly across sectors, with health care the most active in the first half of the year, with 103 IPOs, more than double the volume in the same period in 2013. Technology IPOs doubled in number (78 IPOs), while energy raised the most capital through IPOs in the first six months of 2014 (US$17.6b).

Franck Sebag, Partner EY VC and IPO leader Framalux says: “The IPO market is very strong across a number of regions and sectors and all the indicators are that this upward trend is sustainable. Pricing is now starting to come under pressure in some markets, suggesting that investors are displaying a savvy and commendable level of caution. They are not prepared to invest in deals that are over-valued, which means that now more than ever those companies which come to market at the right time with the right growth story will only attract investor interest if they are priced right.”

Europe displays strength and breadth

Europe has seen 162 IPOs raising US$44.5b in 2014 so far – an increase of 131% in deal numbers and 351% in capital raised compared to the same period a year ago and the best since 2007. London was the region’s standout performer with its main and junior markets hosting a combined total of 71 IPOs raising US$18.5b, accounting for 12% of global deal volume in 2014 so far. Other markets also featured strongly, with the Euronext (Paris, Amsterdam, Brussels and Lisbon) posting 19 deals which raised US$8.6b, while Borsa Italiana (Milan), NASDAQ OMX (Copenhagen and Stockholm) and Bolsa de Madrid – none of which normally feature among the top 10 global exchanges – hosting 11 IPOs raising US$2.5b, 10 deals via US$4.3b and 5 deals via US$5.6b respectively.

Franck Sebag says: “The European IPO market is back with a vengeance in 2014. With an increasingly positive economic environment and supportive monetary policy from central banks, the IPO window is wide open. We are seeing high levels of activity in the traditional UK and French hotspots – with a key driver being financial sponsors looking to exit investments. We also see activity spreading out to other mainland European exchanges as the economic recovery takes hold, which is a very promising sign for the strength of the European IPO market.”

US exchanges post 10-year high

For the first time in more than 10 years, Q214 was the third consecutive quarter with more than 70 IPOs on US exchanges, marking a standout first half of the year. NYSE and NASDAQ accounted for a combined total of 162 IPOs raising US$35.0b in capital in the first half of 2014, including seven deals with IPO proceeds above US$1b.

“With stock markets continuing to hit record highs and volatility at its lowest levels since the financial crisis, an unprecedented number of companies are seeking to go public in the US,” says Franck Sebag. “However, although average first-day returns for IPOs in the second quarter were solid at an average of 9.8%, this was down from the first quarter level of 12.3%. Valuations were also less favorable, with 56% of IPOs in Q214 being priced within or above their initial filing range, down from 70% in Q1 2014. This reflects increased investor caution as to whether the current equity market upward trend will be sustained.”

Asia-Pacific leads by deal volume

Asia-Pacific exchanges saw more IPOs in the first half of 2014 than any other region with 217 deals raising US$33.7b, an increase of 64% and 45% respectively on the first half of 2013. Four of the 20 largest IPOs in the first half of 2014 were on Asian exchanges – three IPOs on Hong Kong and one IPO on Tokyo Stock Exchange. However, activity slowed down in Q214 compared to the first quarter of the year.

“After a bumper start to the year with the reopening of Mainland China’s exchanges to new listings, activity slowed due to approvals again being placed on hold for most of the second quarter,” says Franck Sebag. “But with a further 100 Chinese companies now expected to list in this year and solid investor confidence across a range of markets including Hong Kong, Japan and Australia, the stage is set for considerable, albeit constrained, IPO activity in the second half of the year.”

Prospects are bright for the second half of 2014

Franck Sebag concludes: “In the second half of 2014 we expect the global IPO market to be characterized by a period of normalization. As economic recovery continues in many markets, equity indices remain buoyant and volatility is trending downward, the fundamentals are in place for a sustained period of strong and steady IPO activity.”

“Investor confidence has been bolstered by the relatively strong after-performance of companies that have recently gone public compared to returns in the equity markets more generally. With a solid pipeline of IPO-ready businesses across a broad range of geographic markets and from multiple sectors, there is no shortage of supply. This will increase the pressure on pricing as investors will be wary of meeting over-optimistic valuations.”

“We expect a significant uptick of IPOs in the second half of 2014 from the financial, real estate, technology and consumer products and services sectors, which will benefit from an increase in consumer confidence.”


Notes to editors

About the data
Analysis included on this press release includes all deals listed up to early June and EY’s expectation of deals that will close in the rest of the month. Data sourced from Dealogic as of 17 June 2014. January 2014 through June 2014 IPO activity is based on priced IPOs as of 17 June and expected IPOs by the end of June.

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Appendix: January 2014 - June 2014 global IPOs by sector


Number of deals

% of global deal number

Proceeds (US$ M)

% of global capital raised

Health care















Consumer products and services




















Real estate










Consumer staples





Media and entertainment










Grand Total