In these uncertain times, how do you know the right time to go public? - EY
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
In these uncertain times,
how do you know the
right time to go public?
Global IPO trends: Q1 2019
Markets are waiting for geopolitical
uncertainty to be resolved, resulting
in a quieter first quarter than normal.
The better the question. The better the answer. The better the world works.
Contents
Global IPO market 3
Americas 7
Asia-Pacific 11
Europe, Middle East, India and Africa 21
Appendix 30
About this report
EY Global IPO trends report is released every quarter and looks
at the IPO markets, trends and outlook for the Americas, Asia-
Pacific, Japan and EMEIA regions.
The report provides insights, facts and figures on the 2019
IPO market year-to-date and analyzes the implications for
companies planning to go public in the short and medium term.
You will find this report at the EY Global IPO website. You can
also follow the report on LinkedIn or Twitter.
All values are US$ unless otherwise noted.
Global IPO trends: Q1 2019 | Page 2
Global IPO market
Global IPO momentum slows but Q2 2019
set to rebound
“
While Q1 is usually a quiet IPO quarter, in 2019 we’ve seen IPO markets sent into a cautious
wait-and-see mode as a number of factors collide. The dense fog of geopolitical tensions,
trade issues among the US, China and Europe, as well as uncertainty as to how the UK will
leave the EU, slowed down IPO activity in all regions. As we look to Q2 2019, we only need a
successful mega IPO or unicorn from the robust IPO pipeline for the fog of uncertainty to
clear and global IPO markets to spring into bloom.
Dr. Martin Steinbach
EY Global and EY EMEIA IPO Leader
Global IPO trends: Q1 2019 | Page 3
Global IPO market
Highlights from the market Markets Activity Q1 2019
► Historically, Q1 is a quiet quarter across IPO markets. However, Change on Change on
Q1 2019 has been unusually quiet. Year-over-year volumes are Q1 2019 Q1 2018 Q1 2018
Stock Sectors IPOs
down 41%, while year-over-year proceeds are down 74%. In Q1
exchanges
2019, 199 companies launched IPOs, raising US$13.1b. Although
IPO activity was slower across all regions, pipelines remain
199 41% $13.1b 74% by highest total
by highest
number of IPOs
largest by
proceeds
IPOs globally proceeds proceeds
strong with unicorns and mega deals.
► Asia-Pacific continued to dominate global IPO activity by deal
numbers in Q1 2019, despite the prevailing geopolitical uncertainty
All amounts in table are in US$
and trade tensions. This region’s share of global IPO activity stood at
63% by deal numbers and 64% by proceeds. However, this region Hong Kong Technology Alight Inc.*
saw its IPO activity decline of 24% by deal number and 30% by M&A activity
proceeds in Q1 2019 compared with Q1 2018.
IPO activity (Main and GEM) 45 IPOs $753m
► EMEIA exchanges saw 65% drop in deal volume and 93% decline
2,000 $250
40,000 $4,000
$2.7b $2.1b Technology
US
by proceeds in Q1 2019 compared with Q1 2018. A still unclear 1,500
$200 35 IPOs NASDAQ
path to Brexit, US trade and tariff uncertainties, risks of slower 30,000 $3,000
$150
economic growth and economic challenges in three of Europe’s 1,000 20,000 $2,000
largest economies continued to have a direct impact on EMEIA and $100
European IPO activity. 500 10,000 $1,000
► Americas saw a 44% decline by deal number and 83% decline by
$50 NASDAQ Health care Embassy Office
proceeds in Q1 2019 compared with Q1 2018. The longest US 0 $0
0 $0
$2.5b 32 IPOs Park REIT*
$659m
2015 2016 2017 2018 Q1 19
Government shutdown in the country’s history effectively sent the 2015 2016 2017 2018 Q1 19
19 IPOs $2.1b
US IPO markets into near hibernation for the first two months of Number of IPOs Proceeds US$b Number of M&A Deal value US$b Real estate
2019. The US accounted for 65% of Americas’ IPOs and 92% by India
proceeds. Sources of IPOs National (NSE)
► Technology, health care and industrials saw the largest share of Percentage
IPOs in Q1 2019, while technology, health care and financials led by Q1 2019
10% of proceeds 82% 87% 89% 89% 94%
proceeds. This indicates that investors continue to strike a balance 0%
between growth and value investments. 6%
Shenzhen Industrials Levi Strauss &
Percentage (SZSE and Co.*
► Cross-border activity levels were lower in Q1 2019, representing of IPOs 24 IPOs
0% Chinext) $550m
only 7% of global IPO activity. The one exception was EMEIA, which $1.2b
remained constant compared to 2018. Cross-border IPOs 1%
1% 1% 1%
$2.2b Consumer staples
0%
accounted for 9% of EMEIA companies’ IPO activity in Q1 2019. 94% 17% 13% 18 IPOs US
10% 10% 6%
► Non-financial sponsored companies represented 94% of global NYSE
90% 2015 2016 2017 2018 Q1 19
IPOs in Q1 2019. Ongoing uncertainties and volatility in global
equity markets has an increasing number of financial sponsors Financial sponsor-backed Former state-owned enterprises Non-financial sponsor-backed
considering M&A as a preferred exit route. However, M&A numbers
Figures may not total 100% due to rounding All amounts in table are in US$
are also off to a slower start in 2019.
*Indicates transactions that are expected to be completed prior to 31 March 2019. Transaction size are estimated using mid-point of proposed price range.
All
All values
valuesare
are US$
US$ unless
unlessotherwise
otherwisenoted.
noted. || Q1
Q12019
2019 and
and Q1
Q1 19
19 refer
refer to
to the
thefirst
firstquarter
quarter of
of2019
2019 and
andcover priced
include IPOs IPOs from 1or
completed January to 15 March
with expected 2019
pricing plus
dates expected
prior IPOs by
to 31 March. theas
Data endofof
15March.
March 2019. Global IPO trends: Q1 2019 | Page 4
Global IPO market
Cross-border IPOs
Percentage by number of IPOs globally
Despite the uncharacteristically slow IPO activity in Q1 2019, pipelines remain strong and Q1 19 7%
investors stand in the wings waiting for the right IPO opportunity to arise. With first-day 2018 10%
returns and post-IPO performance continuing to show positive results, we expect IPO 2017 7%
activity to improve as geopolitical issues settle and the year progresses.
2016 6%
2015 8%
Regional share by number of IPOs Regional share by proceeds Top countries of origin Q1 2019
By number of IPOs outside home country
• Singapore (4)
Q1 19 16% 21% 63% Q1 19 25% 10% 64% • Greater China (2)
• Malaysia (2)
• UK (2)
2018 19% 32% 49% 2018 29% 23% 48% • France (1)
• Israel (1)
• Denmark (1)
2017 13% 30% 57% 2017 27% 34% 39%
Top IPO destinations* Q1 2019
By number of IPOs
2016 12% 29% 59% 2016 17% 28% 54%
• Hong Kong (5)
• NASDAQ (4)
2015 16% 30% 54% 2015 19% 36% 45% • Sweden (2)
• Singapore (1)
• Austria (1)
Americas EMEIA Asia-Pacific
or or — = increase or decrease or remain constant for Q1 2019 compared with the full year of 2018
Figures may not total 100% due to rounding. *IPO destinations refer to stock exchanges (main and junior markets).
All values are US$ unless otherwise noted. | Q1 2019 and Q1 19 refer to the first quarter of 2019 and cover priced IPOs from 1 January to 15 March 2019 plus expected IPOs by the end of March. Global IPO trends: Q1 2019 | Page 5
Global IPO market
Outlook EY IPO sentiment radar
► The cautious signals we saw in Q4 2018 for Q1 2019 have The radar contains a variety of market
become reality. However, it may only take a successful mega IPO factors that may impact investor Interest
or unicorn from the robust pipeline for the fog of uncertainty to rate hikes
clear and global IPO markets to bloom once more. With several
sentiment for IPOs.
mega IPOs and unicorns waiting for the right time, as well as Pre-IPO companies should analyze how
robust pipelines of mid- and small-cap IPOs across all regions, these factors may affect their business
we could expect to see a rebound of IPO activity in the second half
of 2019 as geopolitical uncertainties and trade issues show
and valuations. These factors can ultimately
positive signs of stability and resolution. have an impact on the timing and value
► Asia-Pacific: Improving trade relations between China and the of their transaction in view of their Implications from
US, and a turnaround in economic fundamentals should lead to
higher IPO activity in Q2 2019. However, we may have to wait
chosen IPO destination. Oil prices changes in US
until the second half of the year for more sustained improvement
in IPO activity.
trade policies
► EMEIA: US-China-EU trade issues, Brexit and uncertainty with Brexit
respect to the stability of some European country economies will
likely continue to quell enthusiasm for IPO activity in Q2 2019.
However, with strong fundamentals and investor confidence and Potential impact Short-term
low levels of volatility, EMEIA will remain the second largest IPO volatility Geopolitical
► Consider a number of
►
market globally in 2019.
Americas: Despite the IPO near hibernation caused by the US alternative funding or
tensions
Government shutdown, many companies are still preparing to list exit options (multitrack) Currency
during the first half of 2019, once the dust begins to settle. Given
the pipeline of unicorns that are looking to take their companies ► Preserve optionality Economic growth
public in 2019, Americas IPO activity is expected to substantially with early IPO readiness
improve in Q2 2019.
preparations
► Sectors: Investors continue to find the balance between high-
performing potential and more traditional, less risky investments. ► Prepare early to complete
We anticipate a number of health care companies to come to the Stronger regulatory
your IPO quickly in narrow requirements
Americas market, and look for industrials to dominate in Asia-
Pacific. In EMEIA, we expect to see IPOs from technology-related IPO windows
and traditional sectors. ► Be flexible in timing
Cross-border: We envision that cross-border activity will improve
►
as 2019 progresses, with the US, Hong Kong and London
and pricing
continuing to be the top destinations.
All values are US$ unless otherwise noted. | Q1 2019 and Q1 19 refer to the first quarter of 2019 and cover priced IPOs from 1 January to 15 March 2019 plus expected IPOs by the end of March. Global IPO trends: Q1 2019 | Page 6
Americas
Americas IPO markets quiet in Q1 2019
“
It was a quiet quarter across the Americas, partly because of
the US Government shutdown, where the lion’s share of
Americas IPO activity occurs, and partly as a result of
different geopolitical uncertainties affecting other markets.
However, as the dust begins to settle following a quarter of
uncertainties, we expect IPO activity to return to more normal
levels in Q2 2019.”
Jackie Kelley
EY Americas IPO Markets Leader
Global IPO trends: Q1 2019 | Page 7
Americas
Highlights from the markets Brazil‘s B3 Q1 2019
All amounts in table are in US$
Change on prior year
► The US Government shutdown, geopolitical uncertainty and trade issues played a key role in the 12 $7
0 IPOs 10 $6
slowdown of the Americas IPO markets in Q1 2019. Americas exchanges saw 31 IPOs, which raised — 8 $5
$4
$3.3b in total in Q1 2019, a drop of 44% and 83% from Q1 2018, respectively.
$0b proceeds
6
$3
— 4
► US exchanges saw 20 IPOs in Q1 2019, raising US$3.0b, accounting for 65% of Americas’ deals and 2
$2
$0m median deal size
$1
92% by proceeds. — 0 $0
2015 2016 2017 2018 Q1 19
► Besides the US, Canada’s Toronto Main Market and Venture Exchange saw five IPOs, which raised Number of IPOs Proceeds US$b
US$188m in Q1 2019, and Chile raised $69m via a real estate IPO.
Health care dominated in number of deals and proceeds in Q1 2019, accounting for 55% and 37%
►
respectively. Other active sectors included materials that took 16% of the deals, and technology
Canada‘s Toronto Stock Exchange and TSX Venture Exchange Q1 2019
contributed 29% in proceeds. Change on prior year 25 $3
$3
5 IPOs
20
25% 15
$2
$2
$188m proceeds
10
$1
30%
Markets Q1 2019
All amounts in table are in US$ 5 $1
Change on Q1 2018
300 $80
$1m median deal size 33%
0
2015 2016 2017 2018 Q1 19
$0
31 IPOs
200
$40 IPO activity of Canadian Securities Exchange is excluded. Number of IPOs Proceeds US$b
44% 100
$3.3b proceeds 83% 0
2015 2016 2017 2018 Q1 19
$0
Mexico‘s Mexican Stock Exchange Q1 2019
$69m median deal size 51% Number of IPOs Proceeds US$b Change on prior year 10 $4
0 IPOs
8 $3
— 6
Activity Q1 2019
All amounts in table are in US$ $2
$0b proceeds
4
— 2 $1
Stock exchanges Sectors IPOs $0m median deal size —
0
2015 2016 2017 2018 Q1 19
$0
by highest total proceeds by highest number of IPOs largest by proceeds Number of IPOs Proceeds US$b
NASDAQ Health care Alight Inc.*
$2.5b | 19 IPOs US 17 IPOs | $1.2b $753m Technology, NASDAQ, US US‘ NASDAQ and NYSE Q1 2019
300 $100
Change on prior year
NYSE Materials Levi Strauss & Co.* $80
$550m | 1 IPO US 5 IPOs | $2.3m $550m Consumer staples, NYSE, US 20 IPOs 57%
200
$60
$40
$3.0b proceeds
100
Toronto TSX and Venture Technology New Fortress Energy LLC 82% $20
$322m Energy, NASDAQ, US
$188m | 5 IPOs Canada 4 IPOs | $1.0b
$83m median deal size
0 $0
43% 2015 2016 2017 2018 Q1 19
IPO activity in 2016 includes one IPO on BATS exchange. Number of IPOs Proceeds US$b
*Indicates transactions that are expected to be completed prior to 31 March 2019. Transaction size are estimated using mid-point of proposed price range.
All
All values
valuesare
are US$
US$ unless
unlessotherwise
otherwisenoted.
noted. || Q1
Q12019
2019 and
and Q1
Q1 19
19 refer
refer to
to the
thefirst
firstquarter
quarter of
of2019
2019 and
andcover priced
include IPOs IPOs from 1or
completed January to 15 March
with expected 2019
pricing plus
dates expected
prior IPOs by
to 31 March. theas
Data endofof
15March.
March 2019. Global IPO trends: Q1 2019 | Page 8
Americas — US IPO market insight
US Government shutdown sends IPO
market into near hibernation in Q1 2019
“
The US Government shutdown from the latter part of December
2018 until the near end of January — the longest one in US
history — sent the US IPO markets into hibernation in the first
two months of 2019. While IPO activity is recovering quickly in
March, Q1 2019 activity is still notably down from Q1 2018
levels. With a healthy pipeline of IPO candidates, including a
number of unicorns rumored to be ready to go public, we expect
IPO activity to pick up speed in the second quarter.
Jackie Kelley
EY Americas IPO Markets Leader
Global IPO trends: Q1 2019 | Page 9
Americas — US IPO market insight
Highlights from the market Activity Q1 2019
All amounts in table are in US$
Trends Change on
► Due to the longest US Government shutdown in the country’s Q1 2019 Q1 2018
history, US IPO activity declined 57% by deal number and 82% by
Sectors IPOs Median deal size $83m 42%
proceeds, to 20 IPOs raising a total of US$3.0b in Q1 2019 largest by proceeds
by highest number of IPOs
compared with Q1 2018. Median post-IPO
$350m 39%
► Unlike other sectors, health care issuers who had an early start, Health care Alight Inc.* market cap
were able to price their IPOs in early February and thus accounted 14 IPOs | $1.2b $753m Technology, NASDAQ, US Median post-IPO market cap is calculated for IPOs that were priced by 14 March.
for 70% of US IPOs and 40% by proceeds in Q1 2019. Technology
and consumer staples account for 26% and 18% of US proceeds in Technology Levi Strauss & Co.*
2 IPOs | $778m $550m Consumer staples, NYSE, US Cross-border IPOs: top countries/regions of origin
Q1 2019.
Q1 2019
► Market volatility caused foreign issuers to choose to postpone their Financials New Fortress Energy LLC
4
listings. Only 4 cross-border IPOs listed in the US in Q1 2019, in 2 IPOs | $168m $322m Energy, NASDAQ, US Greater China 2 IPO ($168m)
comparison with 15 companies in Q1 2018. France 1 IPO ($151m)
Consumer staples Gossamer Bio, Inc.
► Activity from sponsor-backed issuers declined at a greater rate than 1 IPO | $550m $317m Health care, NASDAQ, US Israel 1 IPO ($31m)
the overall market. However, we do not expect this trend to persist IPOs
as issuance returns to normal levels. Energy Alector Inc. All amounts in table are in US$
1 IPO | $322m $185m Health care, NASDAQ, US
Markets Q1 2019 Outlook
Performance Q1 2019
Change on Q1 2018 All amounts in table are in US$
20 IPOs 57% ► Although there is limited visibility into the IPO pipeline due
to confidential filings, there continues to be rumblings of
$3.0b proceeds 82% IPO pricing and performance
significant IPO activity set to take place during the Q2
First-day Share price performance since 2019 and the second half of 2019.
20% of IPOs are financial sponsor-backed 54% US average return IPO (aka offer-to-current)
markets ► Companies continued their IPO preparations despite the
300
250
$100 Q1 2019
+ or – indicates +5.1% +1.0% SEC closure during the US government shutdown, and are
poised to access the market in the coming months.
$80 change compared First-day and current average returns are mean returns of issuers who started
200
$60 NASDAQ NYSE with offer price at IPO trading by 14 March. ► Significant attention is focused on the class of technology
unicorns expected to complete IPOs, but conditions are
$2.5b $550m
150
100
$40 Equity indices Volatility index ripe for issuers of all sizes and there is potential for
$20 19 IPOs 1 IPO
50
CBOE VIX® significant activity in Q2 2019 and beyond.
0 $0 DJIA S&P 500
2015 2016 2017 2018 Q1 19 -52.4% | 13.5 index level
+11.5% +13.0% YTD 17.9 10-year average
Number of IPOs Proceeds US$b US US
+ indicates a increase in expected volatility as of
14 March 2019 compared with 29 December
All amounts in table are in US$ + or – indicates change since 28 December 2018 2018 for year-to-date (YTD).
*Indicates transactions that are expected to be completed prior to 31 March 2019. Transaction size are estimated using mid-point of proposed price range.
All values are US$ unless otherwise noted. | Q1 2019 and Q1 19 refer to the first quarter of 2019 and cover priced IPOs from 1 January to 15 March 2019 plus expected IPOs by the end of March. Global IPO trends: Q1 2019 | Page 10
All values are US$ unless otherwise noted. | Q1 2019 and Q1 19 refer to the first quarter of 2019 and include IPOs completed or with expected pricing dates prior to 31 March. Data as of 15 March 2019.Asia-Pacific
As Asia-Pacific exchanges show signs of
recovery, IPO markets will likely follow
“
Ongoing trade issues between the US and China continue to have
an effect on IPO market sentiment across Asia-Pacific but with
exchanges across the region recovering from equity market
corrections in Q4 2018, there are signs of a recovery in IPO activity
ahead. Post-IPO performance levels is another key factor to watch
in determining the recovery speed of IPO activity levels in 2019.
Ringo Choi
EY Asia-Pacific IPO Leader
Global IPO trends: Q1 2019 | Page 11Asia-Pacific
Highlights from the market Markets Activity Q1 2019
► Similar to other regions, a lull in IPO activity spread across the
Change on Change on
Asia-Pacific region in Q1 2019 as global economic uncertainty Q1 2019 Q1 2019
and geopolitical volatility prevailed. Ongoing trade tensions
Q1 2018 Q1 2018 Stock Sectors IPOs
exchanges by highest largest by
126 $8.4b
between China and the US in particular were weighing heavily on
market sentiment. This region saw a decline of 24% by deal by highest total number of IPOs proceeds
24% 30%
numbers and 30% by proceeds versus Q1 2018. IPOs proceeds proceeds
► Asia-Pacific continued to dominate global IPO activity in Q1
2019, with 63% of global IPOs and 64% by proceeds. This region
accounted for eight of the top ten exchanges globally by deal
number and six of the top ten exchanges by proceeds. Hong Kong Technology QSR Brands
► Greater China IPO markets were unusually quiet, even for a first All amounts in table are in US$
(Main and 25 IPOs (M) Holdings
quarter. Q1 2019 saw a decline of 34% and 32% when compared GEM) Sdn Bhd*
with Q1 2018 by deal numbers and proceeds, respectively. In $1.0b
Mainland China, however, higher numbers when compared with Q4 $2.7b $500m
Main markets Junior markets 35 IPOs Retail
2018 suggest signs of a recovery in its IPO market. Despite the
Malaysia
slowdown, the Hong Kong Stock Exchange ranked first by both Q1 2019 Change on
Q1 2019 Change on Hong Kong
Q1 2018 Q1 2018 Malaysia (KLSE)
volume and proceeds respectively, among the top 10 global
exchanges.
Japan continues to demonstrate strength in its IPO markets
79 15% 47 36% Shenzhen
(Main and
Industrials Shanghai
Dongzheng
►
IPOs IPOs 21 IPOs
with Q1 2019 numbers exceeding that of Q1 2018. Further, Chinext) Automotive
$1.2b
$6.9b $1.5b
Japan’s exchanges (Tokyo, MOTHERS and JASDAQ) ranked number 31% 26% Finance Co.
two among the top 10 exchanges by volume.
$2.2b
Ltd. *
proceeds proceeds 18 IPOs
► Australia saw lower IPO activity as compared with Q1 2018,
China $358m
with small-cap listings (with proceeds of below US$10m) in Financials
materials, technology and health care dominating. 700 $100 400 $14
China
$90 350
► In Southeast Asia, geopolitical uncertainties, trade tensions and 600
$80
$12
Hong Kong (HKEx)
300
macroeconomic conditions in the region continued to affect IPO 500 $70 $10
Shanghai Health care
activity in Q1 2019. While volume remained constant in Q1 2019, 400 $60 250
$8
Qingdao Rural
$50 200 (SSE) 12 IPOs Commercial
total proceeds fell by 17% compared with Q1 2018. 300 $6
$40
150
$1.5b $0.8b Bank Corp.*
► Financials, industrials and technology posted the highest 200 $30
100
$4
proceeds on Asia-Pacific exchanges in Q1 2019. By deal numbers, 100
$20
$10 50 $2 12 IPOs $327m
technology, industrials and health care top the list. 0 $0 0 $0
China Financials
2015 2016 2017 2018 Q1 19 2015 2016 2017 2018 Q1 19 China
► Median deal size on Asia-Pacific’s main markets rose slightly to Shenzhen (SZSE)
US$48.0m in Q1 2019, up from US$35.6m in 2018. But there Number of IPOs Proceeds US$b
were notably fewer mega IPOs, with one deal that raised more All amounts in table are in US$ All amounts in table are in US$
US$500m in Q1 2019, compared with six in Q1 2018.
*Indicates transactions that are expected to be completed prior to 31 March 2019. Transaction size are estimated using mid-point of proposed price range.
All
All values
valuesare
are US$
US$ unless
unlessotherwise
otherwisenoted.
noted. || Q1
Q12019
2019 and
and Q1
Q1 19
19 refer
refer to
to the
thefirst
firstquarter
quarter of
of2019
2019 and
andcover priced
include IPOs IPOs from 1or
completed January to 15 March
with expected 2019
pricing plus
dates expected
prior IPOs by
to 31 March. theas
Data endofof
15March.
March 2019. Global IPO trends: Q1 2019 | Page 12Asia-Pacific
Trends
Cross-border activity Q1 2019 Transaction sizes
Main markets Junior markets
Asia-Pacific issuers’ Q1 2019 Q1 2019 Change on Q1 2018 Q1 2019 Change on Q1 2018
cross-border activity
Percentage of all Asia-Pacific issuers Median post-
IPO market cap $226.0m 59% $75.0m 97%
5% 6% 6%
10%
6%
Cross-border 6 Median
deal size $48.0m 12%
$11.2m 16%
4.7% of all Asia-Pacific issuers* listed
IPOs
abroad but within the Asia-Pacific region Trends $300 $100
$80
2015 2016 2017 2018 Q1 19
$200
Median post-IPO $60
market cap US$m
$40
Outbound
$100
2
Median deal size $20
US$m
$0 $0
Although almost all 2015 2016 2017 2018 Q1 19 2015 2016 2017 2018 Q1 19
1.6% of all Asia-Pacific issuers* listed
exchanges globally outside Asia-Pacific
IPOs
experienced an
Sources of IPOs
unusually quiet
quarter in IPO Q1 2019
Inbound
Percentage
1.3%0.0%
activity, Asia-Pacific of proceeds
93% 95.5% 94.9% 93% 93.7%
exchanges were most
active, representing 0% of cross-border IPOs globally** 0 Percentage
of IPOs
6.4% 0.0%
eight of the top ten listed in Asia-Pacific but came from IPOs
outside the region
exchanges by deal 93.7%
1% 0.3% 0.0%
numbers in Q1 2019. 98.8% 6%
0.3% 0.2%
6% 6.4%
*There were 128 IPOs by Asia-Pacific issuers in Q1 2019. This analysis is based on the listed 4.2% 4.9%
company domicile, regardless of the listed company exchange. 2015 2016 2017 2018 Q1 19
** There were 13 cross-border IPOs globally in Q1 2019.
Financial sponsor-backed Former state-owned enterprises Non-financial sponsor-backed
All amounts in table are in US$. Figures may not total 100% due to rounding.
All values are US$ unless otherwise noted. | Q1 2019 and Q1 19 refer to the first quarter of 2019 and cover priced IPOs from 1 January to 15 March 2019 plus expected IPOs by the end of March. Global IPO trends: Q1 2019 | Page 13Asia-Pacific
Performance
IPO pricing and performance Q1 2019 Equity indices Q1 2019 Volatility index
First-day Share price Hang Seng Nikkei 225 ASX 200 Hang Seng Volatility
average return performance since IPO
+13.1% +6.4% +9.3% 16.45 index level
Hong Kong Japan Australia -39.5%
Main
markets +29.1% +105.0% YTD
Shanghai FTSE Straits Times KOSPI
Composite +4.7 +5.6%
Junior
markets +40.4% +143.2% +19.9% Singapore South Korea
Mainland China
+ indicates an increase in volatility as at 14 March 2019 compared
with 28 December 2018 for year-to-date (YTD). Whereas - indicates a
decrease in volatility over the same time period.
+ or – indicates change compared with offer price at IPO + or – indicates change since 28 December 2018
Outlook
► Although Q1 2019 was unusually quiet, improving trade relations ► In Mainland China pipelines remain strong and market sentiment ► Despite a quiet start, Australian IPO activity is likely to improve in
between China and the US, and a turnaround in economic appears to be recovering. Further, with the announcement of the the second half of 2019, with a focus on smaller-cap issuers in the
fundamentals should lead to higher IPO activity in Q2 2019. launch of the science and technology innovation board to come in materials (mining and metals) and technology sectors.
However, we may have to wait until the second half of the year for the first half of 2019 and the experimentation with the registration ► Southeast Asia will remain relatively quiet in the first half of 2019.
more sustained improvement in IPO activity. system for listed companies, we expect IPO activity to improve in the If geopolitical and trade uncertainties stabilize globally, Southeast
► Several sectors are expected to remain active. Technology and quarters ahead. Asia may see an uptick in IPO activity in the second half of 2019.
media and entertainment companies will continue to drive IPO ► In Hong Kong, companies remain optimistic in their desire to go Thailand may see higher levels of IPO activity during 2019, while
markets in Asia-Pacific in 2019. At the other end of the spectrum, public, with more than 192 companies having issued Application other emerging markets continue to be affected by volatility in equity
traditional sectors such as industrials and natural resources may Proofs. However, Hong Kong may face new challenges as competition markets. Strong growth in Q4 2018 and a proactive approach by the
consider increasing their IPO presence until trade issues with the with other global exchanges increases, including from Shanghai's Thai Government to boost investment has improved sentiment
US find more solid footing. new technology board, for mega new listings in 2019. among the investors.
► Japan expects IPO activity to remain at 2018 levels through ► Across the Asia-Pacific region, investor appetite may trend
2019. However, without any mega IPOs or unicorns on the horizon, toward more traditional IPOs as investors look to limit their risk, at
more small- and mid-size companies will likely drive activity least in the short-term. Investors will remain focused on valuations
throughout the year. and post-IPO performance.
All values are US$ unless otherwise noted. | Q1 2019 and Q1 19 refer to the first quarter of 2019 and cover priced IPOs from 1 January to 15 March 2019 plus expected IPOs by the end of March. Global IPO trends: Q1 2019 | Page 14Asia-Pacific — Greater China market insight
Higher level of IPO activity to come in
second half of 2019
“
Market sentiment should improve following the positive development of the
Sino-US trade negotiations, which will uplift IPO activity levels for the rest
of the year, but this came a little late to improve IPO activity in Q1. Since the
announcement of the new science and technology innovation board in
January, the regulator is working most diligently to have the new board up
and running in the first half of 2019. Accordingly, we expect to see a strong
second half of the year in Greater China.
Terence Ho
EY Greater China IPO Leader
Global IPO trends: Q1 2019 | Page 15Asia-Pacific — Greater China market insight
Highlights from the markets Markets Activity Q1 2019
► Historically considered a slow quarter, Q1 2019 was no
exception, with IPO activity declining in both Mainland China Q1 2019
Change on
Q1 2019
Change on Hong Kong Main Market
Q1 2018 Q1 2018
and Hong Kong, when compared to Q1 2018 by both deal
numbers and proceeds. Sectors IPOs
► Mainland China saw 30 IPOs raising US$3.7b in Q1 2019.
65 34% $6.4 32% by highest number of IPOs largest by proceeds
Although these numbers are lower when compared with IPOs proceeds
Shanghai Dongzheng
Q1 2018, they are notably up from Q4 2018, suggesting Industrials Automotive Finance Co.
the Mainland China IPO market may be showing signs 7 IPOs | $263m Ltd.* $358m Financials
of recovery.
Activity is also expected to pick up with China’s recent CStone
► All amounts in table are in US$
Consumer products
announcement that its science and technology innovation 5 IPOs | $375m
Pharmaceuticals
board at the Shanghai Stock Exchange will launch during $285m Health care
first half of 2019. This should speed up IPO approvals and Hong Kong Main Market Shanghai and Shenzhen
improve IPO activity in the second half of the year for Mainland Change on Change on Real estate Maoyan Entertainment
Q1 2019 Q1 2019
China. Q1 2018 Q1 2018 4 IPOs | $443m $250m Technology
► Meanwhile, the Hong Kong Main Market saw slight increase in
IPO activity in Q1 2019 compared with Q1 2018. After a
31 7% 30 17%
strong IPO year in 2018, the first three months of 2019 have IPOs IPOs Shanghai and Shenzhen
been quiet as a number of companies already went public
toward the 2018 year-end. Additionally, new restrictions on $2.6b 6% $3.7b 41% Sectors IPOs
“back door” listings has limited IPO activity on the junior market proceeds proceeds by highest number of IPOs largest by proceeds
GEM to only four IPOs raising a total of US$37m in Q1 2019,
compared with 33 IPOs that raised US$286m in Q1 2018. 140 $35 450 $40 Qingdao Rural
Industrials
► While Hong Kong experienced a remarkably strong 2018,
120 $30 400
350
$35
6 IPOs | $782m
Commercial Bank Corp.*
$30
2019 is expected to be comparatively slower with smaller IPO
100 $25
300 $327m Financials, Shenzhen
$25
80 $20
sizes and fewer mega deals. Despite the negative impact of 250
$20
Financials Bank of Xi’an Co. Ltd.
200
the US-China trade tensions, Hong Kong continues to be an 60 $15
150
$15
important market for technology IPOs. New-economy firms 40 $10
100 $10 5 IPOs | $1,240m $311m Financials, Shanghai
like pharmaceuticals and pre-revenue biotech and education 20 $5
50 $5
companies will also continue to attract market attention. 0 $0 0 $0
2015 2016 2017 2018 Q1 19 2015 2016 2017 2018 Q1 19 Qingdao Port
By proceeds, financials, industrials and health care were the Health care
►
Number of IPOs Proceeds US$b
4 IPOs | $423m
International Co. Ltd.
most active sectors in Greater China in Q1 2019. In terms of $306m Industrials, Shanghai
deal numbers, industrials continued to dominate, followed by Shenzhen includes both listings on the Mainboard, Small and Medium Enterprise board and ChiNext
technology and financials sectors. All amounts in table are in US$ All amounts in table are in US$
*Indicates transactions that are expected to be completed prior to 31 March 2019. Transaction size are estimated using mid-point of proposed price range.
All
All values
valuesare
are US$
US$ unless
unlessotherwise
otherwisenoted.
noted. || Q1
Q12019
2019 and
and Q1
Q1 19
19 refer
refer to
to the
thefirst
firstquarter
quarter of
of2019
2019 and
andcover priced
include IPOs IPOs from 1or
completed January to 15 March
with expected 2019
pricing plus
dates expected
prior IPOs by
to 31 March. theas
Data endofof
15March.
March 2019. Global IPO trends: Q1 2019 | Page 16Asia-Pacific — Greater China market insight
Trends
Cross-border activity Q1 2019 Transaction sizes
Hong Kong Main Market Shanghai and Shenzhen
Greater China issuers’ To which destination? Q1 2019 Q1 2019 Change on Q1 2018 Q1 2019 Change on Q1 2018
cross-border activity
Percentage of all China issuers 2 IPOs to NASDAQ Median post-
IPO market cap $134.5m 69% $563.0m 56%
13%
4%
6% 5%
Median
deal size $35.1m 84% $84.1m 5%
3%
Trends $300 $600
$500
2015 2016 2017 2018 Q1 19 $200 $400
Median post-IPO
Q1 2019 market cap US$m $300
$100 $200
Many Chinese companies Leaving Greater China Median deal size
2
$100
US$m
Outbound
$0 $0
have opted to list on US 2015 2016 2017 2018 Q1 19 2015 2016 2017 2018 Q1 19
exchanges over the past IPO
10 years. However, China’s 3.2% of Greater China issuers* listed abroad
Sources of IPOs
announcement that its
science and technology Q1 2019
Coming to Greater China 0%
Percentage 94% 99.1% 99.1% 99% 100%
innovation board at the of proceeds
Shanghai Stock Exchange
will launch in the first half Inbound 5 Percentage
of IPOs
0%
38.4% of cross-border IPOs globally** IPOs
of 2019 could encourage
were listed on HKEx and GEM
more IPO candidates to list 100%
100% 1%
0.3% 0.3%
5% 1.0%
at home. *There were 62 IPOs by Greater China issuers in Q1 2019. This analysis is based on the 2015
0.6%
2016
0.6%
2017 2018
0%
Q1 19
listed company domicile, regardless of the listed company exchange.
** There were 13 cross-border IPOs globally in Q1 2019. Financial sponsor-backed Former state-owned enterprises Non-financial sponsor-backed
All amounts in table are in US$. Figures may not total 100% due to rounding.
All values are US$ unless otherwise noted. | Q1 2019 and Q1 19 refer to the first quarter of 2019 and cover priced IPOs from 1 January to 15 March 2019 plus expected IPOs by the end of March. Global IPO trends: Q1 2019 | Page 17Asia-Pacific — Greater China market insight
Performance IPO pipeline
IPO pricing and performance Q1 2019 Equity indices Q1 2019 Mainland China More than More than
260 192
Share price Shanghai Composite Shenzhen Composite Shenzhen SME
First-day
performance
average return
since IPO +19.9% +27.6% +30.0%
Hong companies are companies
Kong Main
Market
+2.4% +15.8% Equity indices Q1 2019 Hong Kong Volatility index in the China have
Hang Seng Hang Seng Hang Seng Hang Seng Volatility Securities submitted
Shanghai
and
Shenzhen
+44.0% +162.8% +13.1% China China Affiliated 16.45 index level Regulatory
Commission
public filings
with HKEx.
Enterprises Corporations -39.5% YTD
+14.6% +9.7% (CSRC) pipeline.
+ indicates an increase in volatility as at 14 March 2019 compared with 28 December 2018 for year-to-
+ or – indicates change compared with offer price at IPO + or – indicates change since 29 December 2018 date (YTD) . Whereas - indicates a decrease in volatility.
Outlook
► While the extent and duration of the geopolitical uncertainty and requirements on a company’s quality and valuation. Overall, we ► However, Hong Kong may face new challenges as competition for
trade tensions have created headwinds for Greater China IPO anticipate that HKEx regulatory reform will continue to play a positive mega listings in 2019 against other global exchanges increases,
activity in Q1 2019, there is optimism stemming from the current role in attracting IPO activity. including from Shanghai’s new technology board. That said, this type
trade negotiations between the US and China that may ease market ► Hong Kong investors continue to be cautious of new share of competition can help markets in Hong Kong and Shanghai
pessimism. If the two countries can make progress on the trade listings, as they wait and see how geopolitical uncertainty, trade improve.
issues, we expect an uptick in IPO activity in the quarters ahead. issues and a likely increase in interest rates could impact the capital ► In Mainland China and Hong Kong markets, we anticipate more
► In Mainland China, we expect IPO activity to increase with the markets, and by extension, investor sentiment for IPOs. unicorn IPOs to list in 2019, primarily from technology, media and
launch of the science and technology innovation board and ► Companies remain optimistic in their desire to go public on HKEx, entertainment and telecommunications, education, consumer
the experimentation with the registration system for listed with more than 192 companies having issued Application Proofs. We products and health care sectors.
companies, especially for advanced manufacturing and high-tech anticipate that telecommunications, media and entertainment,
companies. technology and consumer products would be the most active sectors
► In Hong Kong, we believe good companies will continue to find the in the Hong Kong IPO market.
right windows to issue IPOs even as investors deal with stricter
All values are US$ unless otherwise noted. | Q1 2019 and Q1 19 refer to the first quarter of 2019 and cover priced IPOs from 1 January to 15 March 2019 plus expected IPOs by the end of March. Global IPO trends: Q1 2019 | Page 18Asia-Pacific — Japan market insight
Smooth sailing for Japan’s IPO market
in Q1 2019
“
Japan’s IPO market saw smooth sailing in Q1 2019, with IPO deal
numbers surpassing those in Q1 2018. These numbers already put
Japan on track to complete 90 to 100 IPOs in 2019. With few, if any,
mega IPOs or unicorns on the horizon, we expect small- to mid-size
deals to dominate the 2019 IPO market.
Shinichiro Suzuki
EY Japan IPO Leader
Global IPO trends: Q1 2019 | Page 19Asia-Pacific — Japan market insight
Highlights from the market Markets Activity Q1 2019
► Japan continues to demonstrate strength in its IPO markets Change on Change on
Q1 2019 Q1 2019
with Q1 2019 numbers exceeding that of Q1 2018. There Q1 2018 Q1 2018
Sectors IPOs Tokyo Main
were 23 IPOs in Q1 2019 versus 18 IPOs in Q1 2018, but Market
proceeds (US$689m) were lower than Q1 2018 (US$1.1b). 23 28% $0.7b 39%
by highest
number of IPOs
largest by
proceeds IPO pricing and
Moreover, Tokyo Stock Exchange ranked number two among IPOs proceeds performance
the top 10 exchanges by deal number in Q1 2019.
► The top three sectors in Q1 2019 by deal numbers were $14.0m 27%
technology, consumer products and real estate median deal size
► Japan’s large corporations continue to demonstrate strong Technology Sankei Real
and steady performance, allowing the Nikkei 225 Index to Estate Inc. First-day
remain stable. Strong Abenomics reform policies and Japan’s
9 IPOs average return
hosting of the Rugby World Cup in 2019 and the Olympics in $103m $203m
Tokyo Main Market JASDAQ and MOTHERS Real estate
2020 are contributing to Japan’s strong economy. These
combined factors create a favorable IPO market in Japan. Q1 2019
Change on
Q1 2018 Q1 2019
Change on
Q1 2018
Tokyo (TSE) +12.3%
► The Tokyo Stock Exchange (TSE) currently has four markets:
Main Market Section 1, Main Market Section 2, JASDAQ and
7 16 33%
Share price
IPOs 17% IPOs
MOTHERS. Of the 3,650 companies currently listed on the TSE, Consumer Escon Japan performance
2,131 are listed on the Main Market Section 1, with companies
ranging in size from large corporations, to mid- and small-size
$0.5b 44%
$0.2b 16%
products
4 IPOs
REIT
Investment
since IPO
Proceeds proceeds
companies. The TSE is looking to reorganize into three
markets: one for major companies, one for mid-size $26.0m $11.5m
$54m
Corp.
$180m
+11.0%
companies and a third for startups (similar to the current 85% 8% Real estate
MOTHERS). These changes will impact where and how IPO median deal size median deal size + or – indicates change
Tokyo (TSE) compared with offer price
at IPO
candidates list their companies in the future. 25 $26 90 $3.0
► Another issue for IPO candidates to consider is Japan’s $22 80
Real estate JDC Corp.
Equity
20 $2.5
70
increasing attention toward corporate governance. In $18
60 $2.0 3 IPOs $62m index
response, IPO candidates should strengthen their internal 15 $14 50
controls as part of their IPO preparations. $10 40
$1.5 $389m Industrials
10 Tokyo (TSE)
Nikkei 225
30 $1.0
► Looking ahead to the remainder of 2019, we expect Japan to 5
$6
20
$0.5
launch around 90 to 100 IPOs during 2019 — an equivalent $2
10
+6.4%
number to 2018. During 2019, we do not expect any mega 0 -$2 0 $0.0
Japan
2015 2016 2017 2018 Q1 19 2015 2016 2017 2018 Q1 19
IPOs like the December 2018 listing of SoftBank Corp., nor are
any unicorns on the horizon. Rather, we anticipate more small- Number of IPOs Proceeds US$b
and mid-size companies coming to market throughout the year. All amounts in table are in US$ All amounts in table are in US$. + or – indicates change since 28 December 2018
All values are US$ unless otherwise noted. | Q1 2019 and Q1 19 refer to the first quarter of 2019 and cover priced IPOs from 1 January to 15 March 2019 plus expected IPOs by the end of March. Global IPO trends: Q1 2019 | Page 20Europe, Middle East, India and Africa
EMEIA IPO activity delayed by Brexit and
other uncertainties
“
Ongoing geopolitical tensions and trade issues, the risk of slower economic growth
and uncertainties about Brexit delayed IPO activity in EMEIA in Q1 2019. IPO
candidates have become more nervous, proceeding cautiously and taking a ‘wait-
and-see’ approach. However, with a number of mega IPOs and unicorns in the
pipeline, and a diverse group of candidates, including family businesses, carve-outs
and high-growth companies, we anticipate IPO activity to spring into action in the
second half of 2019.
Dr. Martin Steinbach
EY Global and EY EMEIA IPO Leader
Global IPO trends: Q1 2019 | Page 21Europe, Middle East, India and Africa
Highlights from the markets Markets Activity Q1 2019
► Geopolitical uncertainty abroad and at home continued to Change on Change on Q1
weigh heavily on EMEIA IPO activity in Q1 2019. Indirectly, EU Q1 2019 Q1 2019
Q1 2018 2018
Stock Sectors IPOs
economies are reacting to US-China trade tensions. More directly,
exchanges
the risk of a hard Brexit, looming US-EU trade issues relating to the
automotive sector, and slower growth and faltering economic
42 65% $1.4b 93% By highest
by highest
number of IPOs
largest by
proceeds
IPOs proceeds proceeds
conditions in the largest EU economies have dampened market
sentiment. As such, IPO candidates are proceeding cautiously
“on sight,” navigating their strategic options in a dense fog of
uncertainties. As a result, EMEIA exchanges posted only 42 IPOs
All amounts in table are in US$
raising a total of US$1.4b in Q1 2019, significantly below Q1 2018
National and Technology Embassy Office
levels in both volume and proceeds.
Bombay 16 IPOs Parks REIT*
► In Europe, Northern EU economies continue to be stable and Stock $659m
interest rates remain low. However, with the three of the four largest Main markets Junior markets Exchange $138m
EU countries struggling, and ongoing trade issues with the US, Change on Change on India
investor confidence is muted. Q1 2019 deal numbers were down
Q1 2019 prior year
quarter
Q1 2019 prior year
quarter $941m Real estate
51%, while proceeds fell by 98% compared with Q1 2018. 14 IPOs National (NSE)
► In the UK, the global slowdown compounded by ongoing 19 62% 23 67% India
uncertainty around Brexit continues to inhibit UK IPO markets. IPOs IPOs
London (Main Consumer Chalet Hotels
$1.3b $0.1b
Q1 2019 saw only four IPOs, with total proceeds of US$154m. 93% 90%
► In India, a liquidity crisis among non-bank lenders caused a
and AIM) products Ltd.
correction in the Indian stock market in Q4 2018, which has proceeds proceeds $154m 7 IPOs $230m
continued to impact Q1 2019 IPO activity. 5 of the 14 IPOs in Q1 4 IPOs $163m India
2019 were launched on the main board of National or Bombay 250 $80 350 $7.0 UK Media and
stock exchanges. EMEIA’s two largest IPOs in Q1 2019 were listed entertainment
300 $6.0
on National Stock Exchange, accounting for 94% of India’s proceeds. 200 National (NSE)
$60
250 $5.0
► In the Middle East and North Africa (MENA), a drop in oil prices,
150
coupled with geopolitical tensions in the region and volatility in 200 $4.0
Malta Materials
$40 DWF Group
global equity markets, have caused investors in MENA IPO markets
100 150 $3.0
$55m 4 IPOs plc*
to press pause. Only two IPOs came to market in Q1 2019 with total
proceeds of US$15m. 50
$20
100 $2.0
1IPO $7m $124m
50 $1.0 Malta UK
► Technology and consumer products posted the highest number
Consumer
of IPOs in Q1 2019. Real estate and media and entertainment 0 $0 0 $0.0
2015 2016 2017 2018 Q1 19 2015 2016 2017 2018 Q1 19 products
dominated in terms of proceeds. London (LSE)
► Cross-border IPO activity level remained constant in Q1 2019, Number of IPOs Proceeds US$b
accounting for 9% of EMEIA companies’ IPO activity in both Q1 All amounts in table are in US$ All amounts in table are in US$
2019 and in 2018.
*Indicates transactions that are expected to be completed prior to 31 March. Transaction size are estimated using mid-point of proposed price range.
All
All values
valuesare
are US$
US$ unless
unlessotherwise
otherwisenoted.
noted. || Q1
Q12019
2019 and
and Q1
Q1 19
19 refer
refer to
to the
thefirst
firstquarter
quarter of
of2019
2019 and
andcover priced
include IPOs IPOs from 1or
completed January to 15 March
with expected 2019
pricing plus
dates expected
prior IPOs by
to 31 March. theas
Data endofof
15March.
March 2019. Global IPO trends: Q1 2019 | Page 22Europe, Middle East, India and Africa
Trends
Cross-border activity Q1 2019 Transaction sizes Q1 2019
Main markets Junior markets
EMEIA issuers’ Q1 2019 Q1 2019 Change on Q1 2018 Q1 2019 Change on Q1 2018
cross-border activity
Percentage of all EMEIA issuers Median post-
IPO market cap $80.0m 81% $11.5m 2%
Cross-border 4
12%
8% 8%
9% 9% Median
deal size $18.0m 88% $2.1m 30%
9.3% of all EMEIA issuers* listed abroad IPOs $300
Trends $20
2015 2016 2017 2018 Q1 19 Median post-IPO $200
market cap US$m $10
$100
Outbound 1
Median deal size
US$m
Although Q1 2019 was a $0
2015 2016 2017 2018 Q1 19
$0
2015 2016 2017 2018 Q1 19
remarkably slow quarter, 2.3% of all EMEIA issuers* listed outside EMEIA IPO
those EMEIA IPOs that Sources of IPOs
did come to the main Percentage
Inbound
Q1 2019
markets experienced 1% 0% of proceeds 80% 83% 89% 90% 98%
average first-day returns
of around 4% and current
0.0% of cross-border IPOs globally** listed
on EMEIA exchanges but came from
0 Percentage
of IPOs
2%0%
IPOs
returns of around 46%, outside the region
1%
98% 2%
giving IPO investor 99% 19% 15%
1% 3%
0%
10% 7% 2%
sentiment a bit of a *There were 43 IPOs by EMEIA issuers in Q1 2019. This analysis is based on the listed 2015 2016 2017 2018 Q1 19
company domicile, regardless of the listed company exchange.
boost. ** There were 13 cross-border IPOs globally in Q1 2019. Financial sponsor-backed Former state-owned enterprises Non-financial sponsor-backed
All amounts in table are in US$. Figures may not total 100% due to rounding.
All values are US$ unless otherwise noted. | Q1 2019 and Q1 19 refer to the first quarter of 2019 and cover priced IPOs from 1 January to 15 March 2019 plus expected IPOs by the end of March. Global IPO trends: Q1 2019 | Page 23Europe, Middle East, India and Africa
Performance
IPO pricing and performance Q1 2019 Equity indices Q1 2019 Volatility indices
First-day
Share price BSE CAC 40 DAX 30 Euro VSTOXX® VDAX® VFTSE 100
performance
average return
since IPO
SENSEX +14.3% +9.7% STOXX 50 13.65 14.53 12.73
+4.7% France Germany +12.3% index level index level index level
India Europe -42.8% -37.9% -43.2%
Main
markets +3.8% +46.1% YTD YTD YTD
FTSE 100 JSE All Share MICEX Tadawul
+6.7% +6.4% +4.2% All Share
Junior
markets +6.7% +11.4% UK South Africa Russian Federation +9.0%
Saudi Arabia
-+ indicates a increase in volatility as at 14 March 2019 compared with 28 December 2018
for year-to-date (YTD) . Whereas - indicates an decrease in volatility over the same time
+ or – indicates change compared with offer price at IPO + or – indicates change since 29 December 2017 period.
Outlook
► Looking ahead to 2019, a number of uncertainties prevail: US-China- is down, giving reasons for investors to maintain confidence and to growing tensions between India and Pakistan.
EU trade tensions, Brexit and uncertainty with respect to the stability of pursue IPO investments that arise in the second half of 2019. ► Across MENA, although pipelines are strong, IPO candidates may
some European country economies. At the same time, with interest rates ► From a regulatory standpoint, Europe is issuing guidance around initial continue to proceed cautiously in Q2 2019, in response to continued
likely to rise in the US in the medium term, it’s only a matter of time coin offerings (ICOs), which may impact the capital raising activity of fluctuations in oil prices and geopolitical tensions in the region. But
before the European Central Bank feels the pressure to follow suit. These early-stage companies. there are positive opportunities ahead for MENA IPO activity:
issues will likely continue to dampen IPO activity in the quarters to come. Saudi Arabia is planning to privatize more than 20 companies in 2019,
On the positive side, many equity markets within EMEIA saw higher ► In the UK, Brexit will likely find resolution in Q2 2019. Once there is
more clarity in terms of how the UK and the EU move forward (a hard or undertaking IPOs and other transactions for each company while
valuations and lower levels of volatility during Q1 2019. maintaining minority interest. This, combined with NASDAQ Dubai
soft Brexit), we anticipate a sudden pickup of IPO activity, with cross-
► Overall, due to strong fundamentals and investor confidence, border IPOs leading the way in Q2 2019 and UK companies readying introducing futures trading on the MSCI United Arab Emirates Index in
EMEIA IPO markets are expected to remain a dominant force themselves for the second half of the year. 2019 and with Kuwait appearing on the Dow Jones Global Benchmark
globally in 2019. Indices with an emerging market classification, should lift MENA IPO
► In India, the performance of equity markets may improve if the Reserve activity levels for the rest of 2019.
► In Europe, all eyes will be on the four largest economies. With the four Bank of India (RBI) takes measures to ease liquidity restrictions. Equity
largest economies (namely, Germany, UK, France and Italy) currently markets may also receive a boost with an increase in election-related ► Given the ongoing political and economic instability in many key African
struggling with slower economic growth, it remains to be seen how government spending or if Indian companies see an increase in corporate markets, we continue to anticipate that African IPO activity will remain
markets will react. The good news for European markets is that despite earnings. This, in turn, could boost IPO activity in the quarters ahead. slow for the first half of 2019.
the geopolitical tensions, many stock indices are up and market volatility Despite these favorable factors, markets may react negatively
All values are US$ unless otherwise noted. | Q1 2019 and Q1 19 refer to the first quarter of 2019 and cover priced IPOs from 1 January to 15 March 2019 plus expected IPOs by the end of March. Global IPO trends: Q1 2019 | Page 24Europe snapshot
Markets Q1 2019 Activity Q1 2019 Trends Q1 2019
Change on Change on Sectors Transaction sizes
Q1 2019 Q1 2018 Q1 2019 Q1 2018
by highest number of IPOs Main markets Change on Q1 2018 Junior markets Change on Q1 2018
23 51% $351m 98% Technology
12 IPOs | $103m
Median post-IPO market cap $86.0m 85% $22.0m 47%
IPOs proceeds
Consumer products
Median deal size $21.0m 94% $4.0m 35%
6% of IPOs are financial 3% of IPOs are financial
4 IPOs | $159m
sponsor-backed sponsor-backed *There were 24 IPOs by European issuers in Q1 2019. This analysis is based on
Health care Cross-border IPOs: top IPO issuers the listed company domicile, regardless of the listed company exchange.
** There were 13 cross-border IPOs globally in 2018.
3 IPOs | $78m
Cross-border Outbound Inbound
All amounts in table are in US$ IPOs
largest by proceeds
17% of all Europe
issuers* listed
4 4.2% of all Europe
issuers* listed
1 0% of cross-border IPOs globally**
listed on European exchanges but
0
abroad IPOs outside Europe IPOs came from outside Europe IPOs
Main markets Junior markets DWF Group plc*
Q1 2019 Change on
Q1 2018
Q1 2019 Change on
Q1 2018
$124m Consumer products, London (LSE)
9 14 Performance Q1 2019
BMIT Technologies plc
67% 30% $55m Technology, Malta (MSE)
IPOs IPOs
Sequana Medical NV
$274m 98% $77m 90% $31m Health care, Euronext (Brussels) Equity indices Volatility index IPO pricing and
Proceeds proceeds performance
160 $6
Stock exchanges CAC 40 DAX 30 VSTOXX®
160 $70
by highest total proceeds First-day average return
140 $60
140
$5 +14.3% +9.4% -42.8% | 13.6 index level
120
$50
120
$4 London (Main and AIM) France Germany YTD Main markets +3.4%
100
100
$40 80 $3
$154m | 4 IPOs UK Junior markets +7.8%
80
$30
Malta (MSE) Euro FTSE 100
60
60
40
$2
VFTSE 100 Share price performance since IPO
40
$20
$55m | 1 IPO Malta STOXX 50 +6.7% -43.3% | 12.7 index level
$1
20 $10
20
Main markets +93.0%
0 $0
0 $0 Euronext and Alternext +12.3% UK YTD
2015 2016 2017 2018 Q1 19
2015 2016 2017 2018 Q1 19
$40m | 2 IPOs France, Belgium, Europe Junior markets +13.68%
Number of IPOs Proceeds US$b Netherlands, Portugal + indicates a increase in volatility as at
14 March 2019 compared with + or – indicates change compared with offer
All amounts in table are in US$ All amounts in table are in US$ + or – indicates change since 29 December 2018 28 December 2018 for year-to-date (YTD). price at IPO
*Indicates transactions that are expected to be completed prior to 31 March. Transaction size are estimated using mid-point of proposed price range.
All
All values
valuesare
are US$
US$ unless
unlessotherwise
otherwisenoted.
noted. || Q1
Q12019
2019 and
and Q1
Q1 19
19 refer
refer to
to the
thefirst
firstquarter
quarter of
of2019
2019 and
andcover priced
include IPOs IPOs from 1or
completed January to 15 March
with expected 2019
pricing plus
dates expected
prior IPOs by
to 31 March. theas
Data endofof
15March.
March 2019. Global IPO trends: Q1 2019 | Page 25EMEIA — UK IPO market insight
Brexit and a global economic slowdown
further dampen IPO activity in Q1 2019
“
The slowdown in global economies compounded with the on-going impact of an
unresolved Brexit has led to a quiet Q1 2019 for IPOs in London, mirroring the
trends witnessed in other key markets. There is, however, a healthy pipeline of both
domestic and international candidates intending to list in London this year and
beyond, and even in these less certain times, a continued stream of follow-on fund
raisings demonstrates the depth of market available in London which will be
available to new market entrants once the dust settles on Brexit route and timing.
London remains one of the pre-eminent markets to list on in Europe.
Scott McCubbin
EY UK and Ireland IPO Leader
Global IPO trends: Q1 2019 | Page 26EMEIA — UK IPO market insight
Highlights from the markets Markets Q1 2019 Activity Q1 2019
► Although Q1 is historically a quiet quarter, the global slowdown
Change on Change on
compounded by ongoing uncertainty around Brexit continues Q1 2019 Q1 2018 Q1 2019 Q1 2018 Sectors IPOs on IPOs on AIM
to inhibit IPO markets in the UK. Only four companies issued by highest Main Market largest by
IPOs, with total proceeds of US$154m — a drop of 56% by deal
numbers and 87% in proceeds from Q1 2018.
4 56% $154m 87% number of IPOs largest by proceeds
IPOs proceeds proceeds
► Q1 2019 is the slowest first quarter in terms deal numbers and
proceeds since Q1 2013 (8 IPOs raising US$354m in total).
► Despite the dearth of transactions, UK IPO pipelines remain
All amounts in table are in US$
robust. Additionally, as demonstrated by follow-on equity Consumer DWF Group plc* Diaceutics
offerings of US$3.5b raised through 111 transactions so far in products plc**
2019, deep pools of capital remain available in London which
$124m
can be accessed when the IPO window reopens. London Main Market London AIM 3 IPOs Consumer products $28m
UK
Change on Change on $153m Consumer products
► As soon as there is clarity regarding the direction of Brexit, Q1 2019 Q1 2018
Q1 2019 Q1 2018 UK
we expect a resurgence of IPO activity and anticipate a
higher percentage of cross-border IPOs coming to the
London Main Market and AIM.
3 40% 1 75%
IPOs IPOs
► Traditional businesses with strong equity stories and limited Technology Starcrest
sensitivity to domestic markets are likely to have the best
chance of success in the current market. There are investors
$126m 89% $28m 55% 1 IPO Education The
Belt & Road
with capital to invest in the right company at the right
proceeds proceeds $1m Ltd.
valuation.
$1m
► IPO candidates should continue to take the pause in the UK 35 $16 50 $8 Consumer products
IPO market to prepare for their listing so that they are well- 30 $14 45 UK
positioned to take advantage of the timing when the IPO 25
$12
40
$6
35
transaction window reopens later in 2019. $10 30
20
$8 25 $4
15
$6
20 Dev Clever
10
$4
15
$2
Holdings plc
10
5 $2 5 $1m
0 $0 0 $0 Technology
2015 2016 2017 2018 Q1 19 2015 2016 2017 2018 Q1 19 UK **This IPO is expected to be priced
on 18 March and will begin trading
Number of IPOs Proceeds US$b on London AIM on 21 March.
All amounts in table are in US$ All amounts in table are in US$
*Indicates transactions that are expected to be completed prior to 31 March. Transaction size are estimated using mid-point of proposed price range.
All
All values
valuesare
are US$
US$ unless
unlessotherwise
otherwisenoted.
noted. || Q1
Q12019
2019 and
and Q1
Q1 19
19 refer
refer to
to the
thefirst
firstquarter
quarter of
of2019
2019 and
andcover priced
include IPOs IPOs from 1or
completed January to 15 March
with expected 2019
pricing plus
dates expected
prior IPOs by
to 31 March. theas
Data endofof
15March.
March 2019. Global IPO trends: Q1 2019 | Page 27You can also read
