Overall IPO activity rebounded in H1 2017 compared to the same period last year as economic fundamentals in major developed markets such as the EU and US stabilized and some political uncertainties settled.

The value of issuance rose by 76% to USD 89 billion and volume increased to 728 deals, up 53% from the first half of last year. As we predicted last June, domestic deals outpaced cross-border IPOs in H1 this year, rising 93% in value compared to a 41% increase in cross-border deal values. The greater popularity of domestic issuance was largely driven by the comfort of home markets and the protection against currency volatility provided by listing in companies’ functional currencies.

That said, deal making has not quite returned to the levels of 2015 – total capital raised being 24% lower in the first half of 2017.

Average deal size globally (domestic and cross-border combined), has increased by 15% to USD 122 million. However the first half of 2016 marked the lowest average deal size in more than six years at just shy of USD 100 million, so the increase is off a low base.

Our Cross-Border IPO Index dropped to 12.6, reflecting that capital raising from cross-border IPOs accounted for barely 14% of the value of global equity capital raised, the lowest level since the first half of 2012.
The London and New York Stock Exchange however, both saw more capital from cross-border IPOs than in H1 2016, with values of USD 3.9 billion and USD 1.3 billion respectively. These two exchanges, along with Hong Kong and NASDAQ, accounted for over 90% of all cross-border IPOs by value.

Although political uncertainty remains a key concern for potential issuers, the absence of blockbuster votes of the magnitude of the Brexit referendum and the US elections have made the timing of IPOs in 2017 much easier than in 2016. Meanwhile, business imperatives are driving companies to proceed with listing plans for deals that have been on the table for some time despite some on-going political uncertainty.

Levels of activity by Chinese companies also impacts the global picture. Stability in China’s stock markets gave regulators confidence that increasing the numbers of new listings would not necessarily dilute liquidity and undermine prices for existing shares. Chinese regulators have as a result loosened the reins on IPOs in recent months, but still heavily control follow-on offerings.

Another growth driver for H1 2017 was the strong aftermarket performance of IPOs last year. While there were fewer listings in 2016, the average return of IPOs from offering price through year end was 26% — the strongest since 2013.

The second half of 2017 is expected to be as strong or stronger, as we see momentum building from a somewhat standing start to the year, due to fewer IPOs being in progress at the close of 2016.
The Cross-border index fell by 13% for the first half of 2017, as domestic deals dominated the share of new equity deals.
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“Markets have performed well, with key indices rising to record levels. Political stability in many markets, strong performance of IPOs and sound economic fundamentals are the forces driving investor demand, while investors have also learned to live with unpredictable political developments.”
Koen Vanhaerents Global Head of Capital Markets at Baker McKenzie
H1-2017-NOTABLE-CROSS-BORDER-IPOsKEY-GLOBAL-DATA-POINTS
H1 2017 NOTABLE CROSS-BORDER IPOs
KEY GLOBAL DATA POINTS
Cross-border-IPO-Index-Global
CROSS-BORDER IPO INDEX
GLOBAL-IPOs-2008-H1-2017
GLOBAL IPOs 2008-H1 2017
CROSS-BORDER IPO INDEX: GLOBAL
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