Weak year on the global markets for IPOs - Switzerland with prominent spin-off and the first SPAC transaction

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• IPO activity in Q3 at around prior-year level with 350 IPOs, issue volume of around 38.4 billion US dollars
• USA with increased issue volume due to biggest technology IPO of the year (ARM)
• Companies in the technology sector and with sustainable business models remain in the focus of investors
• Swiss stock exchange SIX lists one Chinese company in the third quarter

Zurich, 19 December 2023: Companies continued to hold back on IPOs towards the end of the year: a total of 323 companies worldwide went public in the fourth quarter - 19 percent fewer than in the fourth quarter of the previous year 2022 (397). The issue volume fell by 39% to 22.2 billion US dollars. The picture for the year as a whole is similar: the number of IPOs worldwide fell by 8% to 1,298 (previous year: 1,415), while the issue volume shrank by 33% to around USD 123 billion.

"After a difficult year in 2022 with new geopolitical tensions, high inflation in some cases and the turnaround in interest rates, there were initially clear signs of normalization on the global IPO markets this year. However, political developments in the Middle East caused the market environment to deteriorate in the fourth quarter. In view of the postponements of IPOs, the question currently arises as to when the IPO market will regain momentum," says Tobias Meyer, Head of Transaction Accounting and IPO Services at EY in Switzerland.

These are the findings of the latest IPO Barometer of the auditing and consulting firm EY in Switzerland.

The world's largest IPOs

Measured by their issue volume, the top three in the fourth quarter of 2023 were Birkenstock Holding from Germany (USD 1.48 billion), Ades Holding from Saudi Arabia (USD 1.22 billion) and Pure Health Holding from the United Arab Emirates (USD 986 million). The largest IPO worldwide in 2023 was ARM Holding from the UK, which raised around USD 5.2 billion at its IPO in September. The second-largest IPO of the year was the initial listing of US consumer goods provider Kenvue, which raised around USD 4.4 billion in May.

The stock market year from a Swiss perspective - Sandoz Group AG, a SPAC transaction and eight GDRs

In the fourth quarter, another Chinese company went public on the SIX Swiss Exchange with an issue volume of USD 445 million. This brings the total number of companies that have gone public in Switzerland in 2023 to ten, with a combined issue volume of just under USD 2.4 billion. The eight GDRs (Global Depository Receipts) of Chinese companies were joined by the anticipated Novartis spin-off Sandoz, which was completed at the beginning of October. Furthermore, VT5, the first Swiss SPAC on the SIX, acquired the R&S Group. The securities of the R&S Group have been tradable since last Wednesday, December 13. In 2022, 14 companies went public in Switzerland and achieved a combined issue volume of around USD 3.4 billion.

A comparison of the major markets

A comparison of the major markets reveals a mixed picture: While the US market improved from 90 (2022) to 132 transactions with a total volume of more than USD 22 billion, the absolute number of IPOs in Europe and China fell. Europe recorded 136 deals (2022: 171) with an issue volume of USD 12.9 billion (2022: USD 18.9 billion). IPO activity in China (including Hong Kong) reached 372 new issues (2022:501) with a total value of USD 56.2 billion (2022: USD 101.3 billion). In terms of sectors, technology companies continue to lead the way, both in terms of number (264) and issue volume (USD 32.2 billion). Financial investors once again remained well below their long-term figures: In 2023, the number of IPOs of companies from the portfolios of private equity and venture capital funds worldwide was just 66, or 5 percent of all IPOs (down from a 20-year low of 65 in 2022). Meyer says: "Many companies are still waiting for the right time to master the IPO with good preparation. The current year-end rally in many markets and the current low volatility are positive for the IPO year 2024, provided no further external shocks dampen investor sentiment."