Despite the positive performance of major stock indices and a drop in volatility in many markets, geopolitical uncertainties and current commercial disputes continue to cushion investor enthusiasm. As a result, the number of initial public offering (IPO) in the first three months of 2019 declined to 199 globally, recording a value of 13.1 billion dollars, marking a 41% decrease in transaction volume and 74% value of subscriptions.
The technology, health and industrial sectors were the most prolific, with initial public offerings in the first quarter of 2019 cumulating 101 IPOs (51% of total IPO transactions), totaling $ 5.4 billion ( 42% of the capital attracted globally).
After the value of the capital attracted, technology ranks first with 2.1 billion dollars (16% of global capital), according to the quarterly EY Global IPO trends: Q1 2019.
"The dense haze of current geopolitical tensions, trade disputes between the US, Europe and China, as well as the uncertainty of how the UK will go out of the European Union have slowed down IPO activity in all regions. In the second quarter of the year, there is a need for a single IPO megatranzaction or a "unicorn" of the initial public offerings waiting for the uncertainty to spread and for the global IPO markets to return to the second half of 2019 " said Dr. Martin Steinbach, Coordinator of EY Global and EY EMEIA IPO.
IPO activity in the EMEA region has been slowed by Brexit's uncertainties
In the EMEIA region, the volume and value of transactions declined substantially from the first quarter of 2018, with stock exchanges in the region registering only 42 IPO transactions totaling $ 1.4 billion in the first quarter of 2019.
But, although the first quarter of 2019 was a quarter with a particularly weak performance, those IPO transactions in the EMEIA region that were launched on the main markets posted 4% return on the first day and current returns of about 46%, which gave a positive attitude to IPO investors.
In Europe and the UK, the uncertainty generated by Brexit continued to negatively affect IPO markets, and the risk of slow growth in European economies has made only 23 companies launch public offerings totaling 0.4 billion dollars.
The largest EMEA IPO transactions in the first quarter of 2019 took place on the Indian National Exchange, accounting for 94% of India's total underwritings, and 66% of the total value of IPO transactions in the region in the first quarter of this year.
However, a liquidity crisis among non-bank lenders caused a correction of the Indian stock exchange in the fourth quarter of 2018, which continued to affect the IPO's activity in the first quarter of this year.
Cross-border IPO activity remained at 2018 levels, accounting for 9% of the IPO activity of EMEA companies in the first quarter of 2019.
US IPO markets have been quieter as US government blockades
IPO activity in US markets fell steeply in the first quarter, with the value of subscriptions shrinking by 83% to $ 3.3 billion, and transaction volume dropped by 44% to 31 IPOs, compared to the first quarter of the year 2018.
In the US, 65% of IPO transactions in US markets (20), which accounted for 92% of the value of subscriptions ($ 3 billion), occurred in the US.
However, in the United States, market volatility has made foreign issuers decide to postpone their listings. Only four international IPO transactions were listed in the US in the first quarter of this year, compared with 15 companies listed in the same period of the previous year.
NASDAQ ranked second in the world ranking of scholarships according to subscription value in the first quarter of 2019, which amounted to $ 2.5 billion or 19.1% of global underwritings, while the Canadian Stock Exchange Toronto Main Market and Venture Exchange recorded five IPO transactions worth $ 188 million, while a $ 68 million real estate IPO transaction in Chile.
The attitude of IPO markets in the Asia Pacific region affected by trade tensions
Acalmia also covered IPO activity in Asia-Pacific markets in the first quarter of this year, dominated by global economic uncertainties and geopolitical issues.
In particular, current trade tensions between China and the US have had a strong impact on the attitude of the markets, and the region recorded a 24% decline in transaction volume (126) and 30% in value of deals ($ 8.4 billion) from the first quarter of 2018. However, the Asia-Pacific region continued to dominate IPO activity globally in the first quarter, accounting for 63% of the volume of IPO transactions and 64% of its global value.
This region was represented by eight of the top 10 scholarships according to the number of transactions and six of the top 10 scholarships according to the value of the transactions globally. The Hong Kong Stock Exchange ranked first, both in terms of volume and value of transactions in the top 10 global stock exchanges.