Americas IPO momentum sustained in 2018
With 261 IPOs raising US$60b, deal volumes and proceeds of Americas IPO markets in 2018 exceeded 2017 numbers by 14% and 16%, respectively.
Twenty-nine percent of US exchange IPOs were cross-border, with 60 companies from 15 countries choosing to list in the US during 2018, an increase from 24% in 2017.
Canada’s Toronto Stock Exchange and Venture Exchange saw 17 IPOs, which raised US$1.1b, accounting for 7% of Americas IPOs and 2% by proceeds, while 26 unicorn companies (raising a total of US$15.0b) came to the US public markets in 2018.
My colleague Jackie Kelley, EY Americas IPO Markets Leader, summarizes these trends: “Despite muted IPO activity in Central and South America exchanges in the second half of 2018, the IPO pipeline continues to build in the Americas. The US IPO markets remain strong, with both volume and proceeds surpassing 2017 levels. A number of unicorn companies brought IPOs to market in 2018, with more on record stating that they will be conducting IPOs in 2019. As we head into the new year, we expect IPO volumes to remain steady, with greater activity concentrated in the first half of the year.”
Asia-Pacific benefits from megadeals across the region
Asia-Pacific continued to dominate global IPO activity, accounting for six of the top ten exchanges globally by deal number and five of the top ten exchanges by proceeds. However, 2018 deal volumes (666 deals) were down by 31% versus 2017, while proceeds (US$97.1b) were up by 28% due to a number of mega IPOs in the region.
Japan posted 97 IPOs in 2018, a modest 2% increase in terms of volume compared to 2017, but representing a significant 333% increase over 2017 proceeds. This gain can be attributed to the US$21.1b listing of telecommunications giant SoftBank Corp. on the Tokyo Stock Exchange in mid-December – representing one of Japan’s largest ever IPO – and also the listing of Japan’s first two unicorn IPOs.
New listing rules on weighted voting rights and pre-revenue biotech companies attracted high-profile technology and biotech companies to list in Hong Kong, with Hong Kong’s Main Market and Growth Enterprise Market seeing a rise of 24% by deal number (197 deals) and 120% by proceeds (US$35.4b) in 2018 compared with 2017.
Ringo Choi, EY Asia-Pacific IPO Leader, says: “Despite a slowdown in Q4 2018 quarter-on-quarter, Asia-Pacific IPO markets continue to be a beacon across the global IPO landscape. However, as we head into 2019, the Asia-Pacific IPO market has reached a crossroads. If fundamental factors improve, such as greater geopolitical certainty, better trade relations or an increase in liquidity, we may see improvements in IPO activity as early as Q1 2019. However, if the fundamentals remain as they are, we may see a short burst of activity in Q1 2019, but sustained improvement in IPO activity may not be realized until the second half of the year.”