Asia-Pacific continued to dominate global IPO activity, accounting for seven of the top ten exchanges globally by deal number and five of the top ten exchanges by proceeds in 2019.
Japan posted 86 IPOs in 2019, an 9% decrease in terms of volume compared to 2018, with proceeds of US$3.6 b representing an 7% drop compared to 2018 proceeds.
“Despite the geopolitical and trade uncertainty that prevailed throughout much of the year, Asia-Pacific markets performed reasonably well in 2019,” says Ringo Choi, EY Asia-Pacific IPO Leader. “However, as we move into 2020, we expect ongoing geopolitical headwinds and rising investor skepticism to slow IPO activity, particularly in the second half of the year.”
As we move into 2020, we expect ongoing geopolitical headwinds and rising investor skepticism in Asia-Pac to slow IPO activity, particularly in the second half of the year.
EMEIA IPO market buoyed by strong Q4 activity
In EMEIA, deal volumes (234) were down 47% in 2019 however proceeds (US$54.2b) were up 14% - the only region to see a rise in proceeds in 2019. EMEIA exchanges also remained strong, accounting for three of the top ten exchanges globally by proceeds in 2019 (Saudi Arabia, UK and Germany) and four of global top ten IPOs by proceeds.
EMEIA IPO proceeds picked up strongly in Q4 2019 due to four mega IPOs, including Saudi Aramco, with a rise of 174% by proceeds, but a decline of 45% by deal number compared with Q4 2018.
“EMEIA welcomed the largest-ever IPO with Saudi Aramco, which helped drive an increase of 14% in IPO proceeds for the year,” says Dr. Martin Steinbach, EY EMEIA IPO Leader. “As the disruptive headwinds that dampened IPO activity subside, we anticipate a positive impact on investors’ sentiment for IPOs and a modest upturn of IPO activity in EMEIA in 2020. Overall, we expect investors to be more selective in their choice of high-quality equity stories. In addition, the owners and C-suite of IPO bound companies continue to face volatile markets. The will need to prepare early and have a holistic approach to the IPO-ready in order to act quickly when narrow IPO windows open.”
As the disruptive headwinds that dampened IPO activity subside, we anticipate a positive impact on investors’ sentiment for IPOs and a modest upturn of IPO activity in EMEIA in 2020.
Summary
A healthy increase in IPO activity is expected in 2020, particularly in the first half of the year.