Geopolitical tensions combined with overoptimistic valuations on a number of high-profile listings have constrained activity in the global IPO market during 2019. This is according to our Cross-Border IPO Index 2019, which presents an evolving market. While listings were down this year, there were a number of bright spots in all regions.
Most notable was a ramp-up in competition among stock exchanges, each vying for a bigger market share by creating bespoke products to tempt IPOs, which would otherwise have gone elsewhere. Harder times also exposed investors' growing demands, which are most probably a fact to become permanent, given the underperformance of some much expected listings.
"It has been an interesting year for the global capital markets as unexpected issues, both in the market and politically, have significantly impacted upon activity and investor sentiment. While we entered 2019 on an optimistic note, underperformance of a number of larger listings coupled with heightened political issues saw a more muted end to the year than anticipated," said Koen Vanhaerents, Global Chair, Capital Markets.
- Total global IPO activity fell by 20% to 1,242 listings, while the value of capital raised fell by 8% to USD 206.1 billion.
- Total domestic IPO value increased, as capital raising climbed 4% to USD 167.4 billion.
- Activity in the global IPO market in 2020 is set to remain subdued, with the threat of a downturn, further enhanced by the upcoming 2020 US Presidential election, which tends to increase volatility in the global market.
- 2019 was a less affluent year for cross-border IPOs, with the index dropping by 35% to 19.5. Despite this drop, it remains at its second-highest level since 2014.
- Financials was the number one sector for both volume and value in 2019. Despite a decrease of 26% to 236 deals, the sector still raised an impressive USD 45.8 billion, a 3% increase in value from last year.
- High Technology saw fewer IPOs but enjoyed an increase in value of 12% to USD 36.3 billion.