Geopolitical uncertainty and trade tensions plague 2019 IPO landscape; 2020 set to rebound
- 2019 was lackluster year for IPO activity with deals and proceeds down overall
- Technology sector dominates with 263 IPOs raising US$62.8b in 2019
- 2020 expected to see more robust IPO activity, particularly in the first half of the year
LONDON, Dec. 12, 2019 /PRNewswire/ -- Geopolitical uncertainty and trade tensions heavily impacted the 2019 IPO landscape, pushing overall IPO activity down in terms of deals and proceeds. 2019 has registered 1,115 IPOs with proceeds of US$198b – a 19% fall in deal volume and a 4% decrease in proceeds compared with 2018. However, as US-China-EU trade tensions, concerns about economic growth and other geopolitical issues – including Brexit and social unrest in Hong Kong – subside, a healthy increase in IPO activity is expected in 2020, particularly in the first half of the year, as markets are expected to become more volatile leading up to the US Presidential elections.
While Asia-Pacific saw overall declines in deal volume (-1%) and proceeds (-8%) for 2019, it led the regions, with EMEIA second by both deal volume and proceeds and the Americas third in both measures. The technology sector continued to dominate in 2019 with 263 IPOs raising US$62.8b. By deal numbers, health care (174 deals) and industrials (147 deals) were also active in 2019, while by proceeds, energy (US$32b) and health care (US$22.5b) performed well.
Activity in Q4 2019 (353 IPOs and proceeds of US$84.5b) was 5% lower in deal volume and 53% higher by proceeds compared with Q4 2018. Two of the largest IPOs in 2019 came to the market in Q4, improving IPO activity for the quarter. These and other findings were published today in the EY quarterly report, Global IPO trends: Q4 2019.
Paul Go, EY Global IPO Leader, says:
"Two of the largest and long-awaited IPOs came to the market in Q4 2019, improving what had otherwise been a lackluster year in terms of IPO activity. As we head into 2020, we anticipate that some of the geopolitical uncertainties and trade tensions that plagued the IPO market in 2019 will fade. Market volatility will remain, and owners with the ambition of a successful IPO in the near-term will need to be prepared to take advantage of the windows of opportunity expected in the early part of 2020."