Global IPO market stages second quarter recovery but progress will be patchy

Singapore, 5 July 2016

  • Share

A range of factors are creating a stop-start IPO market across the globe in 2016, according to the quarterly EY Global IPO Trends: 2016 2Q. After the weakest first quarter since 2009, 2Q16 reversed that trend with a resounding 120% upswing in capital raised to US$29.6b via 246 deals – up almost a third (29%) on the prior quarter. However, IPO activity at the mid-year point remains significantly below that of the same period last year. At 437, IPO volumes are 38% lower and at US$43.0b, total capital raised is almost two-thirds (61%) down on 1H15.

  • Global IPO activity up on 1Q16, but half-year comparisons disappoint
  • Asia-Pacific most active by deal numbers in 1HQ16 and set for second half uptick
  • Global IPO activity set to remain stop-start until the end of the year

Multiple inter-linked factors impacting global IPO markets
In 2Q16, all major global regions reported substantial gains in terms of capital raised. Asia-Pacific was up 20%, EMEIA was up 187% and the US was up 755% – with the UK and Greater China the only major IPO markets to buck this trend. The most significant gains were made by Australia and New Zealand, which saw proceeds increase by 820%. However, the drag from an exceptionally slow first quarter meant that for the first six months of 2016, even the buoyant Australian and New Zealand markets were down close to a third on the same period in 2015 in terms of capital raised, with EMEIA down 50%, the Middle East down 55%, Asia-Pacific down 65% and the US down 66%.

Commenting on the global IPO market, Jackie Kelley, EY Americas IPO Leader, says:
“Despite the substantial uplift in global IPO activity in the second quarter, there are still a large number of IPO-ready companies sheltering from continued volatility and waiting for much needed clarity on the global economic and political landscape. In the meantime, activity is slow but improving. The ready supply of private capital from PE firms will continue to support this pipeline of larger, more mature businesses waiting for the right time to come to market, particularly in the US.”

Asia-Pacific set for second half uptick
With 229 IPOs raising US$17b in the first half of the year, Asia-Pacific was the most active region by number of deals and second behind EMEIA in terms of capital raised. Although this represents a decrease of 37% and 65% respectively, on the same period in 2015, this is broadly in line with the global trend.

For the quarter, proceeds rose to US$9.3b and at 122 IPOs, the number of deals rose by 14%, while capital raised increased by 20% compared with the prior quarter. Investor sentiment appears less cautious than in some other regions and there is a healthy pipeline of companies ready to go public when the timing is right.

Max Loh, EY Asean and Singapore Managing Partner, says: “The outlook for the IPO market in Asia-Pacific is brightening following a period of uncertainty. Although a number of political and economic headwinds including Brexit, the slowdown in China’s growth rate, fluctuating commodity prices and the possibility of a further interest rate rise in the US continue to weigh on investors, a sense of optimism is returning.”

“The IPO picture in Asean is broadly aligned with what is happening globally. Singapore (SGX) saw its largest new listing in three years – Frasers Logistics & Industrial Trust raised US$668.7m when it listed in June. Earlier in the quarter, Manulife REIT raised US$469.9m. Combined, both deals raised US$1.14b and were among Asia-Pacific exchanges’ top 10 deals for the quarter. Malaysia, Indonesia, Thailand and the Philippines contributed to a total of 10 IPOs, raising US$630m.”

“Barring an uptick in volatility and erosion of confidence, the stage does seem set for an increase in IPOs in the second half of the year.”

Return of PE and the megadeal lift spirits
Financial sponsor involvement is a feature of a healthy IPO market in developed economies and 2Q16 saw participation of sponsors bounce back after a very muted first quarter.

Globally, there were 63 financial sponsor-backed IPOs raising US$10.4b in 2Q16, accounting for 26% of global IPOs by number and 35% of capital raised. This is in contrast to 1Q16 when PE- and VC-backed IPOs accounted for only 16% of deals.

2Q16 also saw the return of the megadeal with six of the top ten IPOs in the quarter raising more than US$1b, with the largest IPO, Denmark’s state-owned DONG Energy, raising more than US$2.5b.

US IPOs outperform other stocks as market starts to thaw  
In the US, mixed domestic and foreign economic signals, compounded by ongoing political uncertainty surrounding the presidential elections, have contributed to high levels of market volatility and fluctuating investor confidence.

At 37, the number of IPOs rose by 363% in the second quarter of 2016 compared with the first and capital raised soared 755% to US$6.2b. While the half-year numbers (45 IPOs raising US$7.0b) still represent declines of 58% by deal number and 66% by proceeds compared with 1H15, this quarter’s performance is a sign the IPO market is starting to return to form. IPOs in 2Q16 are performing well in the after-market, with more than two- thirds (68%) of IPOs pricing within or above their initial filing range by 17 June. IPOs in the first half of 2016 produced average first-day returns of 7.5% and generated returns of around 18.7% over the half year. This means IPOs comfortably outpaced the 2016 year-to-date returns of the Dow Jones Industrial Average and S&P 500 indices.

Kelley says: “Newly listed stocks remain a source of value in an economy where financial market returns are scarce, and 2016 US IPOs did not disappoint, with high double-digit returns. We always knew that this would be a stop-start year for IPOs thanks to headwinds caused by political and monetary uncertainty. Amidst the uncertainty, a robust IPO pipeline has been building for 2017. We expect 2017 to be a great year for US IPOs, filled with unicorns, disruptive technology companies and market innovators across all industries.”

EMEIA recovers strongly as optimism builds and volatility subsides
The EMEIA region saw substantial gains in 2Q16. Proceeds rose 187% on the prior quarter to US$14b and IPO numbers increased 21% to 85 deals. This meant that the EMEIA region ranked first by proceeds and second by deal numbers behind Asia-Pacific in 2Q16. Reflecting the strength of sentiment across the region, EMEIA hosted six of the quarter’s top ten listings, spread across five different exchanges. However, despite this improved performance, capital raised was still 50% down in the first half of the year compared with the same period in 2015 and the number of deals was ran 29% behind 1H15 levels.

Dr. Martin Steinbach, EY EMEIA IPO Leader, says: “Despite the IPO market clearly being affected by uncertainty surrounding the UK’s EU referendum, EMEIA has performed strongly, especially when compared to other regions. While deal sizes are still lower than average, IPOs in the region are offering investors relatively healthy returns when compared to other indices. In addition, the strong rebound in financial sponsor-backed IPOs this quarter is a sign of increasing confidence. In this context we are still positive about the second half of the year as IPO-ready companies continue to take opportunities to come to market across the region. However, prolonged uncertainty in the UK following the EU referendum will clearly have an impact.”

Better to come?
Global IPO markets have been impacted by a complex and interlinked mix of factors this year, which has seen unprecedented political uncertainty on both sides of the Atlantic compounded by volatile economic and stock market performance in many regions of the world. As equity markets stabilize toward the end of the year on the back of greater anticipated political and economic stability, companies that have deferred activity are likely to start emerging from full IPO pipelines globally.

Steinbach says: “We anticipate that the summer (3Q16) will, as normal, be quiet, but that we may have a much stronger second half of 2016. In an environment where investors are hungry to generate returns, and where IPOs globally are maintaining superior after-market performance, demand remains strong for good companies that are well led, well priced and that have a great equity story to tell. With the IPO pipeline continuing to fill, we would expect to see much stronger and more stable IPO activity in 2017.”


About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit

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

About the data
Analysis included on this press release includes all deals listed up to 18 June and EY’s expectation of deals that will close in the rest of June. Data sourced from Dealogic as of 18 June 2016.  January 2016 through June 2016 (i.e., 2Q16 YTD) IPO activity is based on priced IPOs as of 18 June and expected IPOs by the end of June. M&A data is sourced from Dealogic as of 17 March 2016.

Appendix: January 2016-June 2016 global IPOs by sector


Number of deals

% of global
deal number

Proceeds (US$)

% of global
capital raised

Consumer products
and services





Consumer staples















Health care




















and entertainment





Real estate















Global total





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.