Investors look to 2018 for increased growth as the IPO market returns to pre-crisis level highs in 2017

Singapore, 15 December 2017

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  • By deal number, 2017 is the most active year for global IPOs since 2007
  • Asia-Pacific dominates global activity; stellar performance across Asean with Singapore Exchange taking the lead
  • 2018 outlook: IPO activity levels expected to rise with a busy year ahead and mega deals on the horizon

Global IPO activity surged in 2017, making it the most active year since 2007. Year-to-date, 2017 has registered 1,624 IPOs with US$188.8b raised – an increase of 49% by number of deals and 40% by capital raised compared with 2016. But while these figures do not equal 2007 levels (1,974 IPOs, which raised US$338.4b), investors are anticipating a very active 2018 as markets return to their pre-crisis levels. These and other findings were released in latest EY Global IPO trends: Q4 2017.

Dr. Martin Steinbach, EY Global and EY EMEIA IPO Leader, says:

“2017 will close with more IPOs than any year since 2007. With this great momentum, IPO candidates are lining up for 2018. The outlook appears bright, driven by lower volatility across regions, high valuation levels and a renewed appetite for cross-border IPOs, particularly in the US, Hong Kong and London. A healthy global pipeline across a broad range of sectors and markets suggests IPO activity levels will be up with more megadeals, thereby increasing the global proceeds in 2018.”

Buoyant IPO activity in Asia-Pacific; stellar performance in Asean

Asia-Pacific exchanges saw a surge of 44% by deal numbers to 935 IPOs in 2017 after an exceptionally strong first half of the year. However, the pace of listings slowed in Q4 2017, which saw only 240 deals – a 4% drop on Q4 2016. Proceeds in 2017, at US$73.2b, were only 0.2% higher than in 2016, reflecting the marked downward shift in average deal sizes. Exchanges based in Asia-Pacific took the top three rankings globally by deal number in 2017.

Closer to home, Asean exchanges’ year-on-year performance was equally impressive. Not only did the total proceeds of US$9.9b from 104 deals far exceed 2016’s total value of US$5.6b from 77 deals, the region’s share of global IPO proceeds for Q4 also rose from 4% to 5%. Asean also showed no signs of slowing down in the last quarter, where it raised US$3.5b from 30 deals versus 2016’s US$1.7b from 22 deals.

Driving performance in 2017 are the Singapore Exchange (SGX) and the Stock Exchange of Thailand (SET), where their combined proceeds totalled US$6.0b from 28 deals. The SGX led with US$3.1b from 7 deals, and SET raised US$2.9b from 20 deals. Other exchanges in Asean also had a great year: the Indonesia Stock Exchange being the most active with 31 deals raising US$601.2m, Vietnam’s Ho Chi Minh City Stock Exchange raised US$708.7m from 1 deal, and the Bursa Malaysia raised US$1.6b from 5 deals.

Max Loh, EY Asean and Singapore Managing Partner, Ernst & Young LLP, comments:

“Asia-Pacific saw rapid growth in IPO numbers in 2017 and cemented the region’s position as the world’s most active for new listings. Despite fewer mega IPOs, there was a thriving market for small-cap IPOs with this trend looking to continue into 2018.

“Singaporean issuers rounded off a strong year for flotation, where a good proportion of this activity was on overseas exchanges as cross-border listings increased. Conversely, the entire proceeds from Thailand’s issuers were raised in Thailand’s domestic exchanges. This gives rise to an interesting observation that developing Asean stock exchanges have more than sufficient capacity to support capital raising by companies which tend to list domestically.

“Going forward in 2018, local exchanges will continue to face stiff competition from international exchanges that are aggressively bidding for listings from this promising region.”

Momentum in EMEIA is robust

EMEIA saw 469 deals raise US$64.0b in 2017, making the region second only to Asia-Pacific in terms of deal numbers and proceeds. Deal numbers increased by 50% in 2017 compared with 2016, while proceeds rose by 67%. Seventeen mega deals (with proceeds above US$1b) have raised US$28.7b. Reflecting the global trend, cross-border activity by proceeds saw a huge increase, accounting for 14% of IPOs in 2017 compared with 2% in 2016.

Americas upbeat with activity across the region

There were 174 IPOs in the US in 2017, raising US$39.5b, a welcome increase of 84% in terms of proceeds and 55% by volume compared with 2016. This meant that the Americas accounted for 13% of global deals and 27% of global IPO proceeds in 2017. In 2017, the proportion of cross-border IPOs was the highest since 2010, accounting for 24% of US IPOs by number of deals and 25% by proceeds.

2018 outlook: A busy year ahead with mega deals on the horizon

As the year comes to a close, a healthy pipeline of market-ready companies is growing as a result of lower volatility across regions, equity indices still hitting all-time highs and increasing investor confidence. Cross-border deals look set to remain a feature of the global IPO market in 2018, especially with exchanges in US, Greater China and London. This trend will help to support next year’s anticipated listing of the world’s largest oil company with more state-owned enterprise IPOs expected to follow across the Middle East and North Africa.

Steinbach says: “Everything is in place for an exceptional 2018. The stronger-than-expected turnaround in economic activity in the Eurozone has boosted expectations for global economic growth. All the major engines of growth in the global economy are now synchronized in an upward trajectory for the first time since the end of the global financial crisis.”

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Notes to Editors

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This news release has been issued by Ernst & Young LLP, a member of the global EY organization.

About EY’s Initial Public Offering Services
EY is a leader in helping companies go public worldwide. With decades of experience, our global network is dedicated to serving market leaders and helping businesses evaluate the pros and cons of an initial public offering (IPO). We demystify the process by offering IPO readiness assessments, IPO preparation, project management and execution services, all of which help prepare you for life in the public spotlight. Our Global IPO Center of Excellence is a virtual hub, which provides access to our IPO knowledge, tools, thought leadership and contacts from around the world in one easy-to-use source. ey.com/ipocenter

About the data
Analysis in this press release includes all deals listed up to 1 December and EY’s expectation of deals that will close in the rest of the month. Data has been sourced from Dealogic as of 1 December 2017. IPO activity from January 2017 through December 2017 is based on priced IPOs as of 1 December and expected IPOs by the end of December.

EY -  2008 – 17 global IPO activity

Appendix: January 2017 to December 2017 global IPOs by sector

 

Number of IPOs

Percentage of global IPOs

Proceeds (US$m)

Percentage of global capital raised

Consumer products and services

198

12.2

12,930

6.8

Consumer staples

91

5.6

7,203

3.8

Energy

105

6.5

21,261

11.3

Financials

90

5.5

31,838

16.9

Health care

155

9.5

13,812

7.3

Technology

250

15.4

30,925

16.4

Industrials

307

18.9

26,937

14.3

Materials

184

11.3

11,109

5.9

Media and entertainment

58

3.6

5,392

2.9

Real estate

77

4.7

14,100

7.5

Retail

75

4.6

9,004

4.8

Telecommunications

34

2.1

4,268

2.3

Total

1,624

100.0

188,780

100.0