2017 to see uplift in global IPO volume, capital raised

Despite earlier uncertainty over Initial Public Offerings (IPO) at the global market, analysts are upbeat on 2017 outlook. In the out gone year, the reaction to geopolitical events in the financial markets was far more positive than many had predicted as many equity markets rose to new highs. Recently, investors’ eyes turned to 2017 for IPO growth as the market reeled from uncertainty in 2016. 

Martin Steinbach, EY Global and EMEIA IPO Leader, said: “2017 will see an uplift in global IPO volume and capital raised compared to 2016. At this point, however, it seems unlikely that the market will match the record levels of 2014 as some caution and uncertainty will remain across some markets.”

“Overall, Asia-Pacific in 2017 will continue to be the engine room of global IPO activity, with stock exchanges in Greater China leading the way. The China Securities Regulatory Commission (CSRC) began speeding up IPO approvals in November, and we expect this to continue through the first half of 2017, supported by stable markets and a strong pipeline of IPO-ready companies,” Steinbach said.

“The prospects for IPO activity in 2017 look much better, especially in the US where a sharp rebound in new listings can be expected. Financial sponsor-backed IPO activity fell in 2016 compared with 2015, so the combination of rising markets, reduced volatility and strong investor appetite to generate returns is likely to see more exits via this route in the coming year.”

Year 2016 was the weakest IPO year since 2013 despite a surge of activity during the fourth-quarter (Q4) of 2016.  The number of IPOs in 2016 fell 16 percent year-over-year (YOY) in 2016 to 1,055 and capital raised was down by 33 percent to $132.5billion.

The volume of megadeals (IPOs with proceeds over $1billion) also fell from 35 in 2015 to 21. These and other findings were released recently in the EY quarterly report, Global IPO Trends: 2016 Q4.