Ipo market, Asia overtakes the US

The Shenzhen and Shanghai Stock Exchange ranked first and second in the world, respectively, in 1H15 by deal numbers. NASDAQ is now the third-busiest exchange globally and NYSE the fourth

Asia overtakes the US with China that leads Asian IPO boom. According to the quarterly EY Global IPO Trends: 2015 Q2, in the first six months of 2015, US and EMEIA listings lag behind 2014 levels, while Asia-Pacific exchanges up by roughly 50% by number of deals and capital raised.

The result?
NASDAQ is now the third-busiest exchange globally and NYSE the fourth, while Shenzhen Stock Exchange and Shanghai Stock Exchange are first and second, respectively, by deal numbers.

Global Ipo
According to the EY report, by the end of the first half of 2015, global deal numbers had reached 631 IPOs, a 6% increase on the same period last year, but total capital raised was 13% lower than during the first half of 2014, at US$103.7 billion.
Us and Europe IPO activity have been lackluster in 1H15 and this has impacted global number.
“Despite the cooling market, we do not believe the pattern of IPO activity in 2015 reflects a widespread lack of confidence among dealmakers. Instead, it reflects an ongoing pause for breath while entrepreneurs and managers evaluate the broad range of funding options currently available”, Maria Pinelli, EY Global Vice Chair, Strategic Growth Markets, said.
What EY predicts for the global IPO market based on first half 2015? The economy outlook is positive. EY own analysis of global corporate sentiment presents an upbeat picture of broadening economic confidence. According to EY 12th Global Capital Confidence Barometer (CCB), the vast majority of executives (83%) now see the global economy as improving, up strongly from a year ago.
“With improved confidence feeding through into an appetite for transactions, IPOs are just one choice among a widening range of options to create and realize value”, the report said.

Sectors to x-rays
The top three sectors in terms of deal number were industrials (119 IPOs, 19% of global IPOs), followed by health care (97 IPOs, 15%) and technology (94 IPOs, 15%). In terms of capital raised, industrials was the leading sector again, raising a total of US$19.4b, 19% of global IPO proceeds. Other active sectors were financials and energy, which raised US$18.6b (18%) and US$10.3b (10%), respectively.

Us market
The biggest factor impacting global IPO activity is the slowdown in US listings. According to the EY study, in the first six months of 2015, the US saw 101 IPOs raise proceeds of US$19.7b, down 36% by deal number and down 45% by proceeds, from 158 deals with a value of US$35.4b in the same period last year.

European market
With US$34.7b raised, in a total of 165 IPOs, EMEIA ranked second globally on both measures, but was 29% down by proceeds and 24% down by number of deals compared to 1H14. Europe, and in particular the UK, has driven this slowdown, with proceeds down 32% and 67% and deal numbers down 27% and 51%, respectively.

Asian market
With 355 IPOs raising US$48.4b in the first half of 2015 – up 66% and 48% on the same period last year – Asia Pacific was the most active region by both number of new listings and capital raised. In fact, Asia Pacific accounts for 56% of the number of IPOs worldwide in the first half of the year and 47% of capital rased. And six of the top 10 IPOs worldwide in 2015 involved companies from this area.
A number of countries, including Japan, Australia, Thailand and Malaysia, have seen companies raising capital on the public markets, but China has been the key driver.
“So far this year, there have been 239 IPOs raising US$40.0b on Greater China exchanges, an increase of 132% in deal number and 141% by proceeds compared to 1H14 – the research said- In 2015, Greater China exchanges have accounted for 38% of global IPOs by number of deals, and 38% by capital raised”.