HONG KONG – The global initial public offering (IPO) market is showing signs of life as a stock market rebound has encouraged companies to test investor appetites for new listings, particularly in Asia.
But a full recovery seems a long way off.
According to data compiled by Bloomberg, around $25 billion worth of IPOs took place around the world in March and April.
Issuers from Hong Kong to Milan saw an opportunity in the drop in market volatility, analysts said.
Activity was particularly brisk in Asia, where regional exchanges accounted for almost 80 percent of sales of new shares in April. Prices in Europe also recovered.
But fears of a recession have deterred US issuers and slowed a full recovery. Transaction sizes have been smaller on average, and money raised so far in 2023 remains 51 percent below the same period in 2022.
“We are beginning to see green shoots of activity from companies resuming suspended litigation, but there is still a degree of uncertainty in the market,” said Mr. Jason Manketo, global co-head of law firm Linklaters’ equities practice.
Looking more closely at the data, Asia is practically the busiest area for deals in the world right now. But in a key shift from 2022 – when the vast majority of large-volume transactions were concentrated in mainland China – 2023 issuance is coming from a larger part of Asia.
Indonesia was the brightest spot, with two nickel producers rising on their debut. Rakuten Bank skyrocketed after raising 83.3 billion yen (S$829 million) in Japan’s biggest IPO since 2018, and KKR & Co-backed Chinese liquor company ZJLD Group last Thursday traded Hong Kong’s largest offering of
2023
“The IPO market is coming back gradually and slowly. It’s not 100 percent back yet, but there are signs of life and renewed vigor,” said James Wang, co-head of equity capital markets at Goldman Sachs Group in Asia ex-Japan.
While the European IPO market has stalled, with activity in 2023 down about 12 percent from the same period in 2022, there are signs that the gloomy mood is lifting.
Most notably, Lottomatica, the Italian gaming company backed by Apollo Global Management, opened the books for a €600 million (S$889 million) IPO last week, becoming the third major company to hit European exchanges
2023
Additionally, German web hosting company Ionos and electric motor components maker EuroGroup Laminations managed to raise more than $400 million in the region, though both stocks struggled afterwards
debut.
The prospects for IPOs in the US remain difficult.
Just $4.1 billion has been raised for companies to list on U.S. exchanges in 2023, with just three — Nextracker, Atlas Energy Solutions, and Enlight Renewable Energy — accounting for a third of that
Crowd.
“We’re still in an uncertain world, and uncertainty is the worst thing about new issuance,” said Greg Martin, co-founder of Rainmaker Securities, which facilitates secondary transactions for individuals
companies.
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