- Balance for 2022 as a whole: number of IPOs falls by 45 percent compared to a record 2021, the volume falls by 61 percent
- Worldwide, there were 50 percent fewer IPOs in the fourth quarter, issue volume shrinks by 73 percent
- Strongest decline in the USA, China least affected
- In 2022, there were 13 additions with a total volume of more than 3800 million Swiss francs were registered on the SIX Swiss Exchange
- In the fourth quarter, there were three additions to the SIX Swiss Exchange with a volume of CHF 2260 million
Zurich, 15 December 2022. Companies have continued to hold back on IPOs towards the end of the year, with a total of 334 companies going public worldwide in the fourth quarter – 50 percent fewer than in the fourth quarter of the record year 2021. Issue volume fell by 73 percent to 31.9 billion US dollars.
The picture is similar for the year as a whole: the number of IPOs worldwide fell by 45 percent to 1,333, while issue volume shrank by 61 percent to 180 billion US dollars. Nevertheless, compared to the pre-pandemic year 2019, the number of IPOs increased by 16 percent this year.
Worldwide, the difficult economic environment caused a total of 278 companies to postpone or cancel IPOs already announced this year – significantly more than the 10-year average of 202.
Significant IPO declines in the USA and Europe – China 2022 stable
This year, the strongest declines compared to the strong previous year were recorded in the USA, where the number of IPOs fell by 78 percent and the issue volume plunged by 94 percent. In Europe, the number of IPOs fell by 70 percent and their value by 78 percent. IPO activity was much more stable in China (including Hong Kong), where the number and total value of new issues each shrank by 22 percent. China's market share of the global IPO market – in terms of global issuance volume – rose correspondingly sharply from 28 percent in 2021 to 55 percent in the current year.
These are findings of the latest IPO Barometer by audit and advisory firm EY.
"After the record year 2021, 2022 was characterized by high levels of volatility triggered by geopolitical tensions, high inflation and stiff interest rate hikes," says Tobias Meyer, Head of Transaction Accounting and IPO Services at EY in Switzerland. Even the end of the year did not bring a trend reversal – on the contrary, the fourth quarter of 2022 was the weakest fourth quarter in more than 10 years, both in terms of numbers and proceeds.
Financial investors, in particular, have significantly reduced their exit activities. In 2022, the number of company IPOs from private equity fund portfolios fell to 65 – a 20-year low. In the previous year, 286 such transactions had been counted.
13 Additions in the 2022 stock market year in Switzerland
In the fourth quarter of 2022, Acceleron Industries AG went public as a spinoff of ABB with a market capitalization of CHF 1710 million. In addition, Sunwoda Electronic Co Ltd and Hangzhou Great Star Industrial Co Ltd were listed on the SIX Swiss Exchange via Global Depository Receipts (GDRs) with a volume of CHF 550 million. In total, 13 new listings were reported on SIX this year, with a value of over CHF 3800 million.
Over the year, the third quarter stands out with six listings. In the first and second quarters, two new listings each were registered on the Swiss stock exchange. The companies that went public in Switzerland are from the energy, materials, healthcare, real estate, industrials and consumer goods sectors. Activity on the Swiss stock exchange in 2022 was largely shaped by the listing of GDRs by Chinese companies, which was possible for the first time, with a total of eight companies taking advantage of this opportunity.
Of the five companies that went public in Switzerland in 2021, four completed their IPO on the SIX Swiss Exchange, while one company went public on the Bern Stock Exchange BX Swiss. Together, these IPOs achieved an issue volume of around two billion Swiss francs. "In a European comparison, Switzerland is performing well in terms of its size, as well as considering the circumstances, and remains stable in terms of the number and value of IPOs. In 2022, significantly more companies went public than in 2021, in particular due to the listings of GDRs by Chinese companies," says Meyer.
Porsche in the fast lane with its IPO
Two IPOs were completed on the German stock exchange in 2022, which reached a relatively high volume. The reason for this was the IPO of Dr. Ing. h.c. F. Porsche AG. With an issue volume of USD 9.1 billion, this transaction ranked second worldwide, behind the stock market debut of South Korean battery manufacturer LG Energy Solution, which raised USD 10.7 billion in January. The third largest IPO of the year was the initial listing of mobile operator China Mobile, which raised USD 8.2 billion, also in January. In London, 22 IPOs were registered with a volume of 1206 million US dollars.
Companies are waiting for better conditions
"This year, the IPO pipeline has continued to build," says Meyer. "Many companies are waiting for the right time to go public with good preparation. However, with tighter market liquidity, investors are more selective and prefer companies with sustainable business models that can show good numbers in terms of profitability, while clearly articulating their ESG agenda."
Meyer is cautiously optimistic about the coming year: "Volatility on the global capital markets had decreased somewhat recently. In addition, there is a general expectation that interest rate increases will slow down during 2023. This means that the coming year could offer more favorable conditions for IPOs, so that global IPO activity could pick up again, particularly in the second half of 2023."
End of the SPAC boom
The number of SPACs continued to fall in the current year: After a total of 682 SPAC transactions were counted worldwide in the previous year, the number in the current year was only 155 – a decline of 77 percent. The global issue volume shrank by 90 percent from USD 172 billion last year to USD 16.5 billion in 2022.
There are currently around 480 SPACs around the world looking for target companies – 80 percent of which will expire by mid-2023. This means that they are under intense time pressure to invest the money they have raised.
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