Global capital raised from IPOs increased 5% despite a decline in activity levels in a year dominated by megadeals and cross-border listings into US and Hong Kong. The market continued to experience geopolitical uncertainty and related concerns around worldwide trade flows, according to our latest research.
US President Trump’s protectionist policies, the UK’s impending divorce from the European Union and market volatility have contributed to the decline in the overall volume of deals. While total capital raised increased by 5% to USD 219.4 billion, the number of deals fell 17% to 1,448.
Domestic listings slide
That slide was replicated in the domestic IPO market, where the volume dipped by 21% to 1,231 IPOs and value of listings also declined by 11% to USD 158.2 billion, a result of market volatility caused by political concerns and recent and upcoming elections in the US, Indiaand most of Latin America.
The number of listings in Europe, Middle East & Africa, Asia Pacific, and Latin America were all down by an average of 32%, while there was a more positive performance in North America with a 25% increase in listings was recorded, although this did little to offset the overall global decline.
Perhaps surprisingly, the US domestic IPO market was not impacted by the mid-term elections and was the most active of all domestic markets with a total of200 listings recorded at a value of USD 41.7 billion. It was followed by India where 171 IPOs were recorded, a 6% slide on last year, followed by Canada with 107 issues, up 43% year-on-year.
Providing a counter balance to relatively slack domestic trade was an active cross-border IPO market, where capital raising reached a 4-year high.
New listing regimes in Hong Kong, which make it easier for companies to list and continued growth in Chinese-domiciled companies listing in the US, has been behind much of the increase. Young Chinese Biotech companies are said to be heading to Nasdaq to list as a result of its new and more flexible listing requirements.
As a result, our Global Cross-Border Index grew by 46% in 2018 to 23.8 due to a steady increase in the value and volume of IPOs by Chinese issuers listing in Hong Kong, Nasdaq and New York. A total of USD 62.0 billion was raised for the year as a whole, a jump of 68% on 2017 and the highest since 2014. Volume also increased by 19% to 221.
There has been a steady increase in the number of megadeals (raising over USD 1 billion) over the past 3 years, from 22 in 2016, to 30 in 2017 and 35 in 2018 - with North America showing the largest increase.