Could today's uncertainty be your best opportunity to prepare? - 2020 to see more robust IPO activity ey.comipo/trends #IPOreport
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Could today’s
uncertainty be your
best opportunity
to prepare?
Global IPO trends: Q4 2019
2020 to see more robust IPO activity
ey.com/ipo/trends #IPOreport
The better the question. The better the answer. The better the world works.
Contents
Global IPO market 3
Americas 8
Asia-Pacific 12
Europe, Middle East, India and Africa 22
Appendix 29
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 and EMEIA regions.
The current report provides insights, facts and figures on the
IPO market for the full year of 2019* 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.
*The full year of 2019 cover priced IPOs from 1 January 2019
to 5 December 2019 plus expected IPOs by the end of
December.
All values are US$ unless otherwise noted.
Global IPO trends: Q4 2019 | Page 2
Global IPO market
As 2019’s geopolitical tensions fade, 2020’s
IPO market will recover
“
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
need to be prepared to take advantage of the windows of opportunity expected in
the early part of 2020.
Paul Go
EY Global IPO Leader
Global IPO trends: Q4 2019 | Page 3
Global IPO activity — Summary
Key highlights Outlook
• US-China-EU trade tensions, concerns about economic growth and other • As some of the geopolitical uncertainties subside, we expect a healthy increase
geopolitical issues (e.g. Brexit and social unrest in Hong Kong) affected IPO in IPO activity in 2020, particularly in the first half of the year.
activity for much of 2019. Looking at the full year of 2019*:
• Americas: In anticipation of potential volatility around the US presidential election,
• In the Americas, IPO markets have been supported by a very vibrant stock market, many issuers are targeting the first half of 2020 to come to market. There are also
despite the geopolitical and trade uncertainties that ran throughout 2019. healthy IPO pipelines for Brazil, Canada and other markets within the region.
• In Asia-Pacific, geopolitical and trade tensions around the world continue to • Asia-Pacific: Although we expect another modest decline of IPO activity in 2020
take their toll. Yet as other markets declined, 2019 IPO activity has remained compared to past years, a healthy pipeline of IPO candidates means that within the
relatively resilient. right transaction window, IPO activity will pick up especially in the first half.
• EMEIA IPO activity picked up strongly in Q4 2019 with the launch of four mega • EMEIA: As we head into 2020, we expect geopolitical and trade tensions to fade.
IPOs, which came from the energy, media and entertainment, materials and Additionally, we expect to see a resolution to Brexit in Q1 2020. With these
technology sectors. uncertainties resolved or its impact reduced, we anticipate a much improved IPO
market for 2020.
• The technology sector continued to dominate in 2019 by deal numbers and
proceeds. By deal numbers, health care and industrials were active; by proceeds,
energy and health care performed well.
Global activity 2019 Markets 2019
Americas Asia-Pacific EMEIA
Change on Change on Change on Change on
2019 2018 2018 2019 2018 2018 2019 2018 2018 2019 2018 2018
1,115 19% 1,383 213 20% 267 668 1% 676 234 47%
47% 440
IPOs IPOs IPOs IPOs IPOs IPOs IPOs IPOs
$198.0b 4% $205.8b $53.9b 10%
$59.9b $89.9b 8%
$98.3b $54.2b 14% $47.6b
proceeds proceeds proceeds proceeds proceeds proceeds proceeds proceeds
All amounts in table are in US$
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 4
* 2019
YTD 2019refers
andto2019
the full yeartoofthe
refers 2019 and cover
full year priced
of 2019 andIPOs
coverfrom 1 January
priced 2019
IPOs from to 4 December
1 January 2019 to2019 plus expected
4 December IPOsexpected
2019 plus by the end of by
IPOs December. Data
the end of as of 4 December
December. Data as of2019.
4 December 2019.Global IPO market insight
Highlights from the market 2019 activity Stock Sectors IPOs Q4 2019 activity
• For the full year of 2019*, global IPO deal numbers exchanges by number of largest by
Change on Change on
declined by 19% from 2018, while proceeds fell by 2019 2018 by total proceeds IPOs proceeds Q4 2019 Q4 2018
4%. This was primarily due to the US-China-EU
trade tensions, concerns about economic growth 1,115 19% 353 5%
IPOs IPOs
and other geopolitical issues.
• Americas, Asia-Pacific (APAC) and EMEIA all saw
$198.0b 4% $84.5b 53%
proceeds Hong Kong Technology Saudi Aramco* proceeds
declines, both by deal numbers and proceeds in $37.9b $25.6b
263 IPOs
2019 compared with 2018, with the exception of
IPO activity 154 IPOs $62.8b Energy
EMEIA, which saw proceeds rise 14% year-on-year. 2,000 $250 Saudi Arabia IPOs
This is due to the Saudi Arabian Oil Company’s $200
(Tadawul) largest by proceeds
(“Saudi Aramco”) listing, which is the largest IPO of
1,500
$150
2019 and the largest IPO on record by proceeds. 1,000
$100
• The US remains one of the top IPO markets, with 500
$50 NASDAQ Health care Alibaba Group Saudi Aramco
total proceeds of US$50.0b from 165 IPOs on the 0 $0 $26.7b 174 IPOs Holding Ltd. $25.6b
NASDAQ and NYSE combined. 2015 2016 2017 2018 2019
128 IPOs $22.5b $12.9b Energy
Number of IPOs Proceeds US$b
Technology Saudi Arabia (Tadawul)
• Reflecting investor sentiment, first-day returns on Hong Kong (HKEx)
the main markets globally were 17% on average, Sources of IPOs
Alibaba Group Holding
while current post-IPO performance averaged 14%. 76% 57% 94% 94% 93% 91%
Ltd.
• The technology sector continued to dominate in Saudi Arabia Industrials Uber $12.9b
2019 by deal numbers and proceeds. By deal (Tadawul) 147 IPOs Technologies Technology
Hong Kong (HKEx)
numbers, health care and industrials were also active. $26.6b $12.0b
Inc.
By proceeds, energy and health care performed well. 43% 5 IPOs $8.1b
24% Technology Postal Savings Bank of
• Median deal size of main markets IPOs rose by Americas Americas
6%
APAC
6%
APAC
7%
EMEIA
9%
EMEIA
New York (NYSE) China Co., Ltd.*
13% to US$76m in 2019. This can be attributed to 2018 2019 2018 2019 2018 2019 $4.7b
more mega IPOs (those with proceeds above Non-financial sponsor-backed Financials
PE- and/or VC-backed Shanghai (SSE)
US$500m) (65 IPOs, US$123.4b) issued in 2019.
All amounts in table are in US$ Figures may not total 100% due to rounding. All amounts in table are in US$
*Indicates transactions that are expected to be completed prior to 31 December 2019. Transaction size is estimated using the mid-point of the proposed price range (for IPOs that has not been priced by end of 4 December). For stock exchanges ranking, expected proceeds are based on the
mid-point
All of the
values are US$proposed price range.
unless otherwise All values
noted. are and
Q4 2019 US$Q4
unless otherwise
19 refer to thenoted.
fourthQ4 2019ofand
quarter Q4 and
2019 19 refer
covertopriced
the fourth
IPOs quarter of 20192019
from 1 October and cover priced IPOs2019
to 4 December fromplus
1 October 2019
expected toby
IPOs 4 December
the end of 2019 plus expected IPOs by the end of December. 2019 refers to the full year of 2019 and
December. Global IPO trends: Q4 2019 | Page 5
cover2019
YTD priced IPOs
and from
2019 1 January
refers 2019
to the full to of
year 4 December 2019 priced
2019 and cover plus expected
IPOs fromIPOs by the end
1 January of December.
2019 Data as
to 4 December of 4plus
2019 December 2019.
expected IPOs by the end of December. Data as of 4 December 2019.Global IPO market insight
Regional share by number of IPOs Regional share by proceeds • Americas IPO markets performed respectably in Q4
2019 (23% higher by volume but 39% decline by
proceeds versus Q3 2019). However, 2019 IPO
2019 19% 60% 21% 2019 27% 46% 27% volumes declined by 20%, while proceeds fell by 10%
compared with 2018.
2018 19% 49% 32% 2018 29% 48% 23% • Asia-Pacific IPO activity remained relatively
resilient. Deal numbers rose by 43%, while proceeds
were up 96% in Q4 2019 compared with Q3 2019.
2017 13% 57% 30% 2017 27% 39% 34% However, year-on-year, deal numbers fell by 1%, while
proceeds declined by 8% from 2018.
2016 12% 59% 29% 2016 17% 54% 29%
• In EMEIA, IPO activity picked up strongly in Q4
2019, with a rise of 25% by volume and 480% by
proceeds compared with Q3 2019, due to the launch of
2015 16% 54% 30% 2015 20% 44% 36% four mega IPOs. While year-on-year, 2019 IPO numbers
were down 47%, but proceeds rose by 14%.
• Percentage of cross-border activity has also declined
Americas Asia-Pacific EMEIA exchanges Figures may not total 100% due to rounding. in 2019. Most regions saw lower activity levels, except
EMEIA.
Markets 2019 Cross-border IPOs 2019
Percentage by number of IPOs globally
Americas Asia-Pacific EMEIA 2019 8% Top countries of origin Top IPO destinations*
By number of IPOs outside home country By number of IPOs
213 668 234 2018 10%
• Greater China (28) • NASDAQ (40)
IPOs IPOs IPOs
2017 7% • Singapore (14) • Hong Kong (21)
$53.9b $89.9b $54.2b 2016 6%
•
•
Malaysia (7)
Israel (6)
•
•
NYSE (11)
Australia (5)
proceeds proceeds proceeds
2015 7% • US (6) • Singapore (4)
All amounts in table are in US$ *IPO destinations refer to stock exchanges (main and junior markets).
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 6
YTD 2019 and 2019 refers to the full year of 2019 and cover priced IPOs from 1 January 2019 to 4 December 2019 plus expected IPOs by the end of December. Data as of 4 December 2019.Global IPO market insight
Outlook EY IPO sentiment radar
• Some of the geopolitical uncertainties during 2019 are The radar contains a variety of market
expected to subside in Q1 2020, such as the easing of factors that may impact investor
global trade tensions and greater clarity around Brexit after sentiment for IPOs.
the UK election in December. This, combined with strong Monetary
pipeline in major markets, creates a positive environment Pre-IPO companies should analyze policy
for more IPO activity in 2020, particularly in the first how these factors may affect their
half of the year. business and valuations. These factors US election
• Americas: As the US heads into an election year in 2020,
can ultimately have an impact on Implications from
the political calendar and campaign events could increase
the timing and value of their
Oil prices
global trade
transaction in view of their
the market volatility. However, we still anticipate an active
chosen IPO destination. tensions
IPO environment across the Americas, particularly in the
first half of the year. Brexit
• Asia-Pacific: Although this region remained resilient in
Geopolitical
2019 against continuous geopolitical and trade tension
uncertainties, we expect a modest decline of IPO activity Potential impact Short-term
volatility issues
in 2020. • Consider a number of
• EMEIA: Geopolitical and trade tensions are likely to fade in alternative funding or Currency
Economic outlook
2020 with the impending US elections and a resolution to exit options (public versus
Brexit. We anticipate a much improved IPO market for 2020. private) Corporate earnings
• Cross-border: Cross-border IPO activity by deal numbers • Get well prepared with IPO
could be further subdued on the back of continuing readiness assessment
US-China trade negotiations. • Be prepared to complete Stronger regulatory
• IPO candidates: Investors are more discerning in their your IPO quickly in narrow oversight
investment choices and favoring companies which can IPO windows
demonstrate stronger corporate governance culture. IPO • Be more flexible in timing
candidates need to prepare well and early, and have and pricing
realistic valuation expectations so that they can seize
on the available transaction window.
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 7
YTD 2019 and 2019 refers to the full year of 2019 and cover priced IPOs from 1 January 2019 to 4 December 2019 plus expected IPOs by the end of December. Data as of 4 December 2019.Americas
Favorable backdrop for IPO activity
across the Americas
“
As is typical, the bulk of Americas’ IPO activity occurred in the
US for 2019. However, there was activity across a range of
markets including Brazil, Chile and Canada. Coming into year
end, we see momentum in all of these markets. We expect a
strong environment across the Americas for business leaders
who have the ambition to go public in 2020.
Jackie Kelley
EY Americas IPO Leader
Global IPO trends: Q4 2019 | Page 8Americas IPO market insight
Highlights from the markets Brazil‘s B3 2019
All amounts in table are in US$
Change on 2018
• Overall, Americas IPO markets performed respectably, despite the geopolitical
12 $7
5 IPOs 10 $6
and trade uncertainty that ran throughout 2019. 67% 8 $5
$4
$2.3b proceeds
6
$3
• US exchanges accounted for the majority of IPOs in the Americas, 77% by deal 16% 4 $2
2
numbers and 93% by proceeds in 2019. This included 24 unicorn IPOs. $404m median deal size
$1
50% 0 $0
2015 2016 2017 2018 2019
• Toronto and TSX Venture exchanges saw 18 IPOs raising US$295m in 2019. Number of IPOs Proceeds US$b
• In South America, Brazil posted five IPOs in the year, with proceeds of US$2.3b,
while Chile posted two IPOs (from real estate), and raised US1.1b. Canada‘s Toronto Stock Exchange and TSX Venture Exchange 2019
• Health care and technology accounted for the bulk of IPO activity in 2019, Change on 2018 25 3.0
2.5
accounting for 63% in deal numbers and 76% by proceeds. 18 IPOs
20
10% 15
2.0
1.5
$295m proceeds
10
1.0
74%
2019 activity
All amounts in table are in US$ 5 0.5
$36m median deal size* 74%
0
2015 2016 2017 2018 2019
0.0
IPO activity of Canadian Securities Exchange is excluded. *14 of 18 IPOs had deal size Number of IPOs Proceeds US$b
below US$5m, these deals are excluded from the calculation of median deal size.
Change on 2018
213 IPOs
300 $80
20% 200 Mexico‘s Mexican Stock Exchange 2019
$40 10 $4
$53.9b proceeds 100 Change on 2018
10%
0 IPO
8 $3
0 $0
100% 6
2015 2016 2017 2018 2019
$95m median deal size
$2
$0m proceeds
4
3% 100% $1
Number of IPOs Proceeds US$b 2
NA median deal size NA
0 $0
Stock exchanges Sectors* IPOs 2015 2016
Number of IPOs
2017 2018 2019
Proceeds US$b
by total proceeds by number of IPOs by largest proceeds
NASDAQ Health care Uber Technologies Inc. NASDAQ and NYSE 2019
$26.7b | 128 IPOs US 74 IPOs | $13.3b $8.1b Technology, NYSE 250 $100
Change on 2018
200 $80
NYSE Technology Avantor Inc. 165 IPOs 20% 150 $60
$23.3b | 37 IPOs US 55 IPOs | $27.4b $3.3b Health care, NYSE 100 $40
$50.0b proceeds 5% 50 $20
B3 Financials Lyft Inc. 0 $0
$2.3b | 5 IPOs Brazil 18 IPOs | $4.0b $2.6b Technology, NASDAQ $110m median deal size 1% 2015 2016 2017 2018 2019
*IPO activity of Canadian Securities Exchange is excluded. Number of IPOs Proceeds US$b
Median deal size is calculated for IPOs that were priced by end of 4 December.
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 9
YTD 2019 and 2019 refers to the full year of 2019 and cover priced IPOs from 1 January 2019 to 4 December 2019 plus expected IPOs by the end of December. Data as of 4 December 2019.Americas — US IPO market insight
US IPO market fundamentals are
strong as we head into 2020
“
While overall activity decreased in 2019, the US IPO market is
experiencing an exciting period of innovation with developments in
direct listings and record issuance from Special Purpose Acquisition
Vehicles. US indices are at all-time highs and leaders of private
businesses have increasing options to access the public markets. We
anticipate strong activity in 2020, particularly in the first half of the
year.
Jackie Kelley
EY Americas IPO Leader
Global IPO trends: Q4 2019 | Page 10Americas — US IPO market insight
Highlights from the market 2019 activity IPOs
Change on 2018 Sectors
• Although the number of IPOs and proceeds are down by number of IPOs largest by proceeds
year-on-year from 2018, US IPO markets continue to 165 IPOs 20%
Health care Uber Technologies Inc.
perform well. In Q4 2019, 37 IPOs launched on US $50.0b proceeds 5% 73 IPOs | $13.3b $8.1b Technology, NYSE
exchanges with proceeds totalling US$5.7b (a decline of 8%
by deal numbers and 26% by proceeds versus Q4 2018). 55% of IPOs are financial sponsor-backed 26% pts Technology Avantor Inc.
52 IPOs | $27.2b $3.3b Health care, NYSE
• Health care and technology sectors dominated 2019 US 250 $100
activity, accounting for 44% and 32% by deal numbers, and NASDAQ Financials Lyft Inc.
200 $80
17 IPOs | $3.7b $2.6b Technology, NASDAQ
26% and 54% in proceeds, respectively. 150 $60 $26.7b
128 IPOs Energy XP Inc.*
• US exchanges continue to be the destination of choice 100 $40
6 IPOs | $1.7b $1.7b Financials, NASDAQ
for foreign companies with 51 cross-border IPOs in 2019. 50 $20
NYSE
Despite uncertainty around trade between the two nations, 0
2015 2016 2017 2018 2019
$0
$23.3b Real estate Pinterest Inc.
Greater China market remains the most active origin with 37 IPOs 4 IPO | $279m $1.6b Technology, NYSE
Number of IPOs Proceeds US$b
28 deals. All amounts in table are in US$
• Financial sponsor-backed IPOs represented 55% of 2019
US IPOs by volume and 77% by proceeds.
Trends Performance 2019
All amounts in table are in US$
2019 Change on 2018
Outlook Median deal size $110m 1% IPO pricing and performance
Median post-IPO First-day Share price performance since
• Heading into an election year, the political calendar and $573m 12% US average return IPO (aka offer-to-current)
market cap markets
campaign events could increase volatility. However, we still
anticipate an active IPO environment, particularly in the
Median deal size and median post-IPO market cap are calculated for IPOs that were
priced by 5 December.
+ or – indicates +14.6% +12.7%
change compared First-day and current average returns are mean returns of issuers who started
first half of the year. Cross-border IPOs: top countries/regions of origin 2019 with offer price at IPO trading by 4 December
• More private companies are evaluating a direct listing and Equity indices Volatility index
we expect more to occur in 2020. Greater China 28 IPOs ($3.8b)
CBOE VIX®
• IPO candidates will need to be mindful of valuations as
investors are exhibiting increased discipline in their 51 Europe 8 IPOs ($1.4b)
Israel 6 IPOs ($488m)
DJIA
+19.9%
US
S&P 500
+25.2%
US
14.5 current
16.2 YTD average
investment choices. IPOs Others 9 IPOs ($3.4b) 16.9 10-year average
+ or – indicates change since 28 December 2018 Current index level is for 4 December 2019
*Indicates transactions that are expected to be completed prior to 31 December 2019. Transaction size is estimated using the mid-point of the proposed price range (for IPOs that has not been priced by end of 4 December). For stock exchanges ranking, expected proceeds are based on the
mid-point
All of the
values are US$proposed price range.
unless otherwise All values
noted. are and
Q4 2019 US$Q4
unless otherwise
19 refer to thenoted.
fourthQ4 2019ofand
quarter Q4 and
2019 19 refer
covertopriced
the fourth
IPOs quarter of 20192019
from 1 October and cover priced IPOs2019
to 4 December fromplus
1 October 2019
expected toby
IPOs 4 December
the end of 2019 plus expected IPOs by the end of December. 2019 refers to the full year of 2019 and
December. Global IPO trends: Q4 2019 | Page 11
cover2019
YTD priced IPOs
and from
2019 1 January
refers 2019
to the full to of
year 4 December 2019 priced
2019 and cover plus expected
IPOs fromIPOs by the end
1 January of December.
2019 Data as
to 4 December of 4plus
2019 December 2019.
expected IPOs by the end of December. Data as of 4 December 2019.Asia-Pacific
Steady performance in 2019 may slow
in 2020 against ongoing headwinds
“
Despite the geopolitical and trade uncertainty that prevailed
throughout much of the year, Asia-Pacific markets performed
reasonably well in 2019. However, as we move into 2020, we expect
ongoing geopolitical headwinds and rising investor scepticism to
slow IPO activity, particularly in the second half of the year.
Ringo Choi
EY Asia-Pacific IPO Leader
Global IPO trends: Q4 2019 | Page 12Asia-Pacific IPO market insight
Highlights from the market 2019 activity Q4 2019 activity
• Geopolitical and trade tensions took their toll on
Change on Change on
global IPO activity, but Asia-Pacific IPO activity 2019 2018 Stock Sectors IPOs Q4 2019 Q4 2018
has remained relatively resilient. Deal numbers exchanges
668
by number of largest by
and proceeds saw significant increase in Q4 2019. 1% by total proceeds IPOs proceeds 239 20%
IPOs IPOs
Year-on-year, 2019 deal numbers were down 1%,
while proceeds declined 8% from 2018. $89.9b 8% $44.7b 28%
proceeds Proceeds
• Asia-Pacific accounted for seven of the top ten Technology
Hong Kong Alibaba Group
exchanges by deal numbers and five of the top ten Main markets (HKEx and Holding Ltd.
151 IPOs IPOs
by proceeds in 2019. GEM)
700 $100
$90
$25.4b $12.9b largest by proceeds
• Mainland China and Hong Kong stock exchanges 600
$80 $37.9b Technology
combined, due to the early success of Shanghai’s
500 $70
$60
154 IPOs Hong Kong (HKEx)
400
STAR market, saw an increase in IPO activity in Q4 300
$50
Alibaba Group
$40
2019, which pushed 2019 deal numbers to surpass 200 $30 Holding Ltd.
2018 by 14% and proceeds by 28%. 100
$20
$10
Shanghai (SSE Industrials Budweiser $12.9b
and STAR) 118 IPOs Brewing Co.
• In Japan, IPO activity rebounded in Q4 2019 with a
0 $0
Technology
2015 2016 2017 2018 2019 $26.4b $7.3b APAC Ltd. Hong Kong (HKEx)
rise of 16% by deal numbers over Q4 2018. But
120 IPOs $5.7b
2019 deal numbers are down 9% versus 2018, and Postal Savings Bank of
proceeds fell by 87% due to no mega IPO in 2019. Junior markets Consumer staples
China Co., Ltd.*
Hong Kong (HKEx)
$4.7b
400 $14
• In Australia, 2019 IPO activity remains low (down 350 $12
Financials
33% by deal numbers and 49% by proceeds), driven 300
$10 Shenzhen Materials Postal Savings Shanghai (SSE)
by a combination of geopolitical and trade issues, 250
$8 (SZSE and 76 IPOs Bank of China
and slower GDP growth.
200
Chinext) Co., Ltd.* ESR Cayman Ltd.
150
$6
$6.1b
$4
$9.3b $4.7b $1.8b
• In ASEAN, 2019 IPO deal numbers were 4% higher 100
Financials Real estate
than 2018 levels, while proceeds rose by 11%.
50 $2
77 IPOs Hong Kong (HKEx)
0 $0 Shanghai (SSE)
2015 2016 2017 2018 2019
• Technology, industrials and materials posted the
highest deal numbers in 2019, while technology, Number of IPOs Proceeds US$b ** Hong Kong Stock Exchange saw proceeds of US$7.81b while
Shanghai Stock Exchange raised US$7.75b. All amounts in table are in US$ All amounts in table are in US$
financials and real estate dominated proceeds.
*Indicates transactions that are expected to be completed prior to 31 December 2019. Transaction size is estimated using the mid-point of the proposed price range (for IPOs that has not been priced by end of 4 December). For stock exchanges ranking, expected proceeds are based on the
mid-point
All of the
values are US$proposed price range.
unless otherwise All values
noted. are and
Q4 2019 US$Q4
unless otherwise
19 refer to thenoted.
fourthQ4 2019ofand
quarter Q4 and
2019 19 refer
covertopriced
the fourth
IPOs quarter of 20192019
from 1 October and cover priced IPOs2019
to 4 December fromplus
1 October 2019
expected toby
IPOs 4 December
the end of 2019 plus expected IPOs by the end of December. 2019 refers to the full year of 2019 and
December. Global IPO trends: Q4 2019 | Page 13
cover2019
YTD priced IPOs
and from
2019 1 January
refers 2019
to the full to of
year 4 December 2019 priced
2019 and cover plus expected
IPOs fromIPOs by the end
1 January of December.
2019 Data as
to 4 December of 4plus
2019 December 2019.
expected IPOs by the end of December. Data as of 4 December 2019.Asia-Pacific IPO market insight
Trends
Cross-border activity 2019 Transaction sizes
Main markets Junior markets
Asia-Pacific issuers’ 2019 Change on 2018 2019 Change on 2018
cross-border activity
Percentage of all Asia-Pacific issuers
Median post-
IPO market cap $311m 128% $72m 74%
10% Cross-border 22 Median
deal size $64m 84%
$15m 48%
3% of all Asia-Pacific issuers* listed
IPOs $400 $100
7% abroad but within the Asia-Pacific region Trends
7% $80
$300
5% 6%
Median post-IPO $60
market cap US$m $200
$40
Outbound 29
Median deal size $100
$20
US$m
$0 $0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
4% of all Asia-Pacific issuers* listed IPOs
All amounts in table are in US$.
2015 2016 2017 2018 2019 outside Asia-Pacific
8
Into Asia-Pacific
Although 2019 IPO deal number and proceeds are down
Inbound IPOs compared with 2018, investor sentiment remains
9% of cross-border IPOs globally** listed in Asia-Pacific but came from outside the region positive in Asia-Pacific, based on the strength of first-
day returns and post-IPO performance.
*There were 689 IPOs by Asia-Pacific issuers in 2019. This analysis is based on the listed company domicile, regardless of the listed company exchange.
** There were 89 cross-border IPOs globally in 2019.
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 14
YTD 2019 and 2019 refers to the full year of 2019 and cover priced IPOs from 1 January 2019 to 4 December 2019 plus expected IPOs by the end of December. Data as of 4 December 2019.Asia-Pacific IPO market insight
Performance
IPO pricing and performance 2019 Equity indices 2019 Volatility index
First-day Share price Hang Seng Nikkei 225 ASX 200
average return performance since IPO Hang Seng Volatility
+2.2% +15.6% +16.8% 17.4 index level
Hong Kong Japan Australia
-36.0%
Main
markets +19.6% +18.3% Shanghai FTSE Straits Times KOSPI
YTD
Composite +3.5% +1.4% -14.1%
Junior
markets +30.7% +104.6% +15.4%
Mainland China
Singapore South Korea Q3 2019
- indicates a decrease in volatility as at 4 December 2019 compared
with 28 December 2018 for year-to-date (YTD) and
+ or – indicates change compared with offer price at IPO + or – indicates change since 28 December 2018 30 September 2019 for end of Q3 2019. Whereas + indicates an
increase in volatility over the same time period.
Outlook
• Although Asia-Pacific exchanges remained resilient in candidates’ confidence to go public. HKEx is also paying uncertainty has become the new reality. As such,
2019 against continuous geopolitical and trade more attention at the valuation levels of smaller IPOs investor sentiment is expected to become increasingly
uncertainty, we expect a modest decline of IPO activity engaged in traditional business but expecting high IPO resilient to volatility.
in 2020, more probably in the second half of 2020. valuations. This may mean that IPO candidates will have • In Singapore, openness of policies and the SGX’s effort to
• In Mainland China, we saw for the first time a company to be more sizeable than just barely meeting the basic promote their market should prove fruitful in terms of
listed on the STAR market had its first-day trading price listing requirements; or be new economy companies improved IPO activity in 2020.
fell below its IPO price. This signals to the market that not which are favored by the market players before they can
• Across Southeast Asia, we expect IPO activity will
every company listed on the STAR market will be a “home enter the public capital market.
continue to be dominated by entrepreneurial companies
run.” As such, investors may be more discerning of • In Japan, a healthy IPO pipeline and steady equity coming to the public markets.
valuations of IPO candidates in 2020, which could have an markets raise expectations that Japan will continue to
• Across Asia-Pacific, IPO activity in 2020 is expected to
impact on IPO activity. launch around 90 to 100 IPOs annually. However, the
retain a balance between the more traditional and well-
• In Hong Kong, a series of new policies that restrict the increase in VAT from 8% to 10% as of October 2019 may
understood sectors, such as natural resources and
use of shell companies and suspend inactive or have a weakening impact on investor sentiment.
industrials, with the high-growth opportunities offered by
persistently poorly performing companies from trading, • In Australia, we expect mining and technology small-cap the technology and health care sectors.
while intended to protect investors, may impact IPO IPOs to continue as the theme in 2020. Ongoing global
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 15
YTD 2019 and 2019 refers to the full year of 2019 and cover priced IPOs from 1 January 2019 to 4 December 2019 plus expected IPOs by the end of December. Data as of 4 December 2019.Asia-Pacific — Mainland China and Hong Kong IPO market insight
STAR market and healthy pipelines suggest
robust IPO activity in 2020
“
With the launch of mega IPOs and the recovery of IPO activity in Q4
2019, the Hong Kong IPO market is finishing 2019 on a high note. In
Mainland China, the newly launched STAR market continued to drive
robust IPO activity in the last quarter of the year. Higher IPO activity
and positive post-IPO returns in 2019, combined with strong IPO
pipelines suggest that 2020 will be a very active year for IPOs in
Mainland China and Hong Kong markets. Owners that are well
prepared to capture the right IPO window, flexible on valuations and
understand regulatory requirements will have a clear advantage.
Terence Ho
EY Greater China IPO Leader
Global IPO trends: Q4 2019 | Page 16Asia-Pacific — Mainland China and Hong Kong IPO market insight
Highlights from the markets 2019 activity
Hong Kong includes both listings on the Mainboard and Growth Enterprise Market (GEM).
Shenzhen includes listings on the Mainboard, Small and Medium Enterprise board and ChiNext. 2019 top 5 IPOs
All amounts in table are in US$.
• A flurry of deals in Q4 2019 pushed 2019
Hong Kong (HKEx) Shanghai and STAR Shenzhen (SZSE) IPOs
Mainland China and Hong Kong combined deal largest by proceeds
numbers to be 14% higher compared with 2018 2019
Change on
2018 2019
Change on
2018 2019
Change on
2018
(351 versus 309) and 28% higher in terms of Alibaba Group
proceeds (US$73.6b versus US$57.6b). 154 25% 120 107% 77 67%
Holding Ltd.
$12.9b
IPOs IPOs IPOs
• In Hong Kong, despite ongoing social concerns, the Technology
IPO market recovered in Q4 2019 as five mega IPOs $37.9b 4% $26.4b 95% $9.3b 22%
Hong Kong (HKEx)
and 53 other IPO candidates seized their windows of proceeds proceeds proceeds
Budweiser Brewing Co.
opportunity to enter the public capital market.
APAC Ltd.
• With 154 IPOs raising a total of US$37.9b in 2019, 250 $40 250 $30 250 $20 $5.7b
Hong Kong ranked first among global exchanges 200
$35
$25 200
Consumer staples
200
by deal numbers and proceeds. HKEx accounted for $30
$20
$15 Hong Kong (HKEx)
$25
two of the top ten IPOs globally by proceeds.
150 150 150
100
$20 $15
100
$10
Postal Savings Bank of
• In Mainland China, Shanghai’s new STAR market $15 100
$10
$10
$5
China Co., Ltd.*
continued to shine as 35 IPOs launched in Q4 2019 50
$5
50
$5
50
$4.7b
with proceeds of US$4.6b. This surge of activity 0 $0 0 $0 0 $0
Financials
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
pushed Shanghai’s SSE and STAR exchanges into Shanghai (SSE)
third place among the global top 10 by deal Number of IPOs Proceeds US$b
ESR Cayman Ltd.
numbers and fourth by proceeds in 2019.
Sectors Sectors Sectors $1.8b
• Meanwhile, Shenzhen (SZSE) and ChiNext ranked by number of IPOs by number of IPOs by number of IPOs Real estate
fifth by deal numbers and sixth by proceeds. Hong Kong (HKEx)
Industrials Industrials Technology
• Mainland China market also accounted for 5 of the 35 IPOs | $1.2b 30 IPOs | $4.1b 20 IPOs | $1.9b
top 20 deals globally in 2019. CGN Power Co., Ltd.
Consumer products Technology Industrials $1.8b
• Industrials, technology and materials were the 21 IPOs | $2.1b 28 IPOs | $5.7b 15 IPOs | $1.2b Energy
most active sectors in Greater China by deal Technology Materials Materials Shenzhen (SZSE)
numbers in 2019. By proceeds, technology led the 18 IPOs | $14.2b 27 IPOs | $4.5b 10 IPOs | $606m
way, followed by financials and consumer staples. All amounts in table are in US$
*Indicates transactions that are expected to be completed prior to 31 December 2019. Transaction size is estimated using the mid-point of the proposed price range (for IPOs that has not been priced by end of 4 December). For stock exchanges ranking, expected proceeds are based on the
mid-point
All of the
values are US$proposed price range.
unless otherwise All values
noted. are and
Q4 2019 US$Q4
unless otherwise
19 refer to thenoted.
fourthQ4 2019ofand
quarter Q4 and
2019 19 refer
covertopriced
the fourth
IPOs quarter of 20192019
from 1 October and cover priced IPOs2019
to 4 December fromplus
1 October 2019
expected toby
IPOs 4 December
the end of 2019 plus expected IPOs by the end of December. 2019 refers to the full year of 2019 and
December. Global IPO trends: Q4 2019 | Page 17
cover2019
YTD priced IPOs
and from
2019 1 January
refers 2019
to the full to of
year 4 December 2019 priced
2019 and cover plus expected
IPOs fromIPOs by the end
1 January of December.
2019 Data as
to 4 December of 4plus
2019 December 2019.
expected IPOs by the end of December. Data as of 4 December 2019.Asia-Pacific — Mainland China and Hong Kong IPO market insight
Trends
Cross-border activity 2019 Transaction size
Hong Kong (HKEx) Shanghai and Shenzhen
Mainland China and Hong Kong 2019 Change on 2018 2019 Change on 2018
issuers’ cross-border activity
Median post-
$140m $536m
28
Percentage of all China issuers From Greater China IPO market cap
117% 21%
12%
Outbound IPOs
Median
deal size $35m 111% $96m 11%
8% of Greater China issuers* listed abroad
8% Trends $150 $600
$500
6%
$100 $400
5% Median post-IPO
4%
To which destination? market cap US$m $300
24 IPOs to NASDAQ Median deal size
$50 $200
$100
US$m
4 IPOs to NYSE
$0 $0
2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019
All amounts in table are in US$.
From which country?
13 IPOs from Singapore
21
Into Greater China Despite an overall drop in cross-border IPO activity globally
4 IPOs from Malaysia
Inbound IPOs
2 IPOs from US
in 2019, China is still the most active source of outbound
cross-border IPOs. Inbound, Hong Kong remains a popular
24% of cross-border IPOs globally** cross-border destination behind the US, with 21 foreign
were listed on the HKEx 1 IPO from Germany issuers choosing to list on HKEx.
1 IPO from Thailand
*There were 361 IPOs by Greater China issuers in 2019. This analysis is based on the listed company domicile.
** There were 89 cross-border IPOs globally in 2019.
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 18
YTD 2019 and 2019 refers to the full year of 2019 and cover priced IPOs from 1 January 2019 to 4 December 2019 plus expected IPOs by the end of December. Data as of 4 December 2019.Asia-Pacific — Mainland China and Hong Kong IPO market insight
Performance
IPO pricing and performance 2019 Equity indices 2019 Mainland China IPO pipeline
First-day
Share price Shanghai Composite Shenzhen Composite Shenzhen SME More than More than
performance since
417 168
average return
IPO +15.4% +26.9% +30.4%
Hong Kong
Main
Board
+6.2% +7.1% Equity indices 2019 Hong Kong Volatility index
companies are companies
Shanghai Hang Seng Hang Seng Hang Seng China Hang Seng Volatility in the China Securities have submitted
and +67.2% +71.0% +2.2% China Affiliated 17.4 index level Regulatory Commission public filings
Shenzhen Enterprises Corporations -36.0% YTD
(CSRC) pipeline with HKEx
+2.6% +1.9% -14.1% Q3 2019
+ or – indicates change compared with offer price at IPO + or – indicates change since 29 December 2018 - indicates a decrease in volatility as at 4 December 2019 compared with 28 December 2018 for year-to-
date (YTD) and 30 September 2019 for end of Q3 2019. Whereas + indicates an increase in volatility over
the same time period.
Outlook
• With the upcoming US presidential election in 2020, strong. If liquidity improves, political and social • Furthermore, from a regulatory standpoint, potential
China and the US appearing to be close to reaching uncertainty can subside and, together with the launch of government reforms to Mainland China’s capital market,
phase one of their trade agreement and, combined with anticipated mega IPOs, the prospects for IPO activity in and a proposal to allow spin-off listings on the A share
an anticipated resolution to Brexit, the volatility Hong Kong look favorable. market could propel increased IPO activity in 2020.
affecting Mainland China and Hong Kong IPO markets
• For IPO candidates seeking to list on the Hong Kong • Mainland China IPO candidates need to have a clear
are expected to subside in Q1 2020. Consequently, we
exchange, the key is to be well-prepared to capture the understanding of the CSRC’s requirements and learn
anticipate that the uptick we saw in Q4 2019 IPO
IPO window when it opens. from the cases that the CSRC had rejected the
activity across the Mainland China and Hong Kong
application so that they can be fully prepared for a
exchanges will continue into 2020. • In Mainland China, a strong IPO pipeline will sustain
successful IPO.
robust IPO activity in the Shanghai, STAR and Shenzhen
• In Hong Kong, global and local political and social
markets, as demonstrated by more than 417 and 160
uncertainty will likely have an impact on IPO activity in
IPO candidates in the CSRC pipeline and STAR market
2020. However, with more than 168 companies having
pipeline at the end of November 2019, respectively.
submitted their A1 filings to HKEx, the pipeline remains
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 19
YTD 2019 and 2019 refers to the full year of 2019 and cover priced IPOs from 1 January 2019 to 4 December 2019 plus expected IPOs by the end of December. Data as of 4 December 2019.Asia-Pacific — Japan IPO market insight
Conditions look bright for
healthy IPO market in 2020
Global IPO trends: Q4 2019 | Page 20Asia-Pacific — Japan IPO market insight
Highlights from the market 2019 activity Q4 2019 activity
• Japan IPO activity rebounded in Q4 2019, Change on Q4 2019
Change on Q4 IPOs
2019
Sectors IPOs
2018
increased 16% by number over Q4 2018 but 2018 largest by proceeds
proceeds fell by 92%. While, 2019 number is 9% 89 9%
by number of
IPOs
largest by
proceeds
36 16% SOSiLA Logistics
lower versus 2018, proceeds fell by 87% due to the IPOs IPOs REIT Inc.*
lack of any mega IPOs in 2019. $458m
• As a result of the Tokyo Stock Exchange’s (TSE)
$3.6b 87% $1.8b 92% Real estate, Tokyo (TSE)
proceeds proceeds
stricter examination of IPO applications to cool Freee Co., Ltd.*
down the market and address listed companies’ Technology SOSiLA $304m
compliance issues, 2019 saw 89 IPOs which is less
Tokyo Main Market 39 IPOs Logistics Technology, MOTHERS
25 $26 REIT Inc.*
than 2018. $1.7b
20
$22
$458m Medley Inc.
• Despite lower IPO activity, the TSE, which consists $18
Real estate $164m
15
of the Main Market, JASDAQ and MOTHERS, ranked $14
Tokyo (TSE)
Technology, MOTHERS
$10
fourth among the top 10 global exchanges by 10
$6 All amounts in table are in US$
deal numbers in 2019. 5
$2
Consumer Sansan Inc.
• Technology remains the most active sector for 0
products
Performance 2019
-$2
2015 2016 2017 2018 2019 $359m
Japan in 2019 by deal numbers and proceeds. 11 IPOs Technology
JASDAQ and MOTHERS MOTHERS
• Looking ahead to 2020, with a healthy IPO pipeline 80 $3.0
$127m IPO share price performance
and steady equity market, we expect around 90 to 78
First-day Share price performance
100 IPOs to come on TSE annually. However, an 76
$2.5
Tokyo average return since IPO
74 $2.0 Main
increase in VAT in October may have a weakening
effect on companies’ performance and investor
72
70
$1.5
Real estate Freee Co.,
market +13.3% +30.9%
68 $1.0
sentiment. On the brighter side, the 2020 Olympic 66
9 IPOs Ltd.* + or – indicates change First-day and current average returns are mean returns
compared with offer price at IPO of issuers who started trading by 4 December.
$0.5
Games should boost investor confidence. 64
$1.0b $304m
62 $0.0
Technology Equity indices
• IPO candidates need to be well-prepared to 2015 2016 2017 2018 2019
MOTHERS
catch the right IPO window. They should start Number of IPOs Proceeds US$b
Nikkei 225 MOTHERS TOPIX
preparing early to ensure that they can be properly There were also 2 IPOs on Fukuoka Q-Board which raised
+15.6% +12.4% +14.0%
US$9m; 1 IPO on Nagoya’s Centrex (US$8m) and 1 IPO
supported by professionals in addressing the on Sapporo Securities Exchange’s Ambitious Market
(US$1m).
tightened TSE rules. All amounts in table are in US$
+ or – indicates change since 28 December 2018 Current index level is for 4 December 2019
*Indicates transactions that are expected to be completed prior to 31 December 2019. Transaction size is estimated using the mid-point of the proposed price range (for IPOs that has not been priced by end of 4 December). For stock exchanges ranking, expected proceeds are based on the
mid-point
All of the
values are US$proposed price range.
unless otherwise All values
noted. are and
Q4 2019 US$Q4
unless otherwise
19 refer to thenoted.
fourthQ4 2019ofand
quarter Q4 and
2019 19 refer
covertopriced
the fourth
IPOs quarter of 20192019
from 1 October and cover priced IPOs2019
to 4 December fromplus
1 October 2019
expected toby
IPOs 4 December
the end of 2019 plus expected IPOs by the end of December. 2019 refers to the full year of 2019 and
December. Global IPO trends: Q4 2019 | Page 21
cover2019
YTD priced IPOs
and from
2019 1 January
refers 2019
to the full to of
year 4 December 2019 priced
2019 and cover plus expected
IPOs fromIPOs by the end
1 January of December.
2019 Data as
to 4 December of 4plus
2019 December 2019.
expected IPOs by the end of December. Data as of 4 December 2019.Europe, Middle East, India and Africa
Shifting geopolitical winds will send
IPO activity higher in 2020
“
EMEIA welcomed the largest ever IPO with Saudi Aramco, that helped drive an
increase of 14% in IPO proceeds for the year. As the disruptive headwinds that
dampened IPO activity subside, we anticipate a positive impact on investor
sentiments for IPOs and a modest upturn of IPO activity in EMEIA in 2020.
Overall, we expect investors to be more selective in their choice of high-quality
equity stories. In addition, owners and C-suite of IPO bound companies
continue to face volatile markets. They will need to prepare early and have a
holistic approach to be IPO ready in order to act quickly when narrow IPO
windows open.
Dr. Martin Steinbach
EY EMEIA IPO Leader
Global IPO trends: Q4 2019 | Page 22Europe, Middle East, India and Africa IPO market insight
Highlights from the markets 2019 activity Q4 2019 activity
• EMEIA IPO proceeds picked up strongly in Q4
2019 due to four mega IPOs led by Saudi Aramco, 2019 Change on 2018
Stock Sectors IPOs Q4 2019
Change on
Q4 2018
resulting in a rise of 174% by proceeds but a decline exchanges
by 45% in deal numbers versus Q4 2018. 234 47% by proceeds
by number of
IPOs
largest by
proceeds 60 45%
IPOs IPOs
• EMEIA’s high exposure to geopolitical tensions and
uncertainties (more so than the Americas and Asia- $54.2b 14% $32.6b 174%
Pacific), is reflected in the strongest decline in deal proceeds proceeds
numbers in 2019 (down 47% versus 2018). EMEIA Saudi Arabia Technology Saudi Aramco*
was the only region where proceeds rose (14%). (Tadawul and 55 IPOs $25.6b IPOs
Main markets Nomu)
• EMEIA accounted for three of the top ten 250 $80 $10.0b Energy largest by
exchanges globally by proceeds and one by volume. $26.6b Saudi Arabia proceeds
(Tadawul)
It saw four of the global top ten IPOs by proceeds.
200
$60 5 IPOs
Saudi Aramco*
• In Europe, while 2019 deal numbers and proceeds 150
$40 $25.6b
fell by 37% and 39% respectively over 2018, largely 100
Energy
stemming from the region’s exposure to political $20
London (Main Industrials Nexi SpA Saudi Arabia (Tadawul)
tensions and trade issues, Q4 2019 improved 50 and AIM) 27 IPOs $2.3b
markedly by volume and values over Q3 2019, 0 $0
$5.8b $4.0b Technology
Borsa Italiana
demonstrating Europe’s resilience. 2015 2016 2017 2018 2019 21 IPOs Française des Jeux SA
• In the UK, the December 12 general election and the Junior markets $2.0b
Media and entertainment
still unresolved Brexit situation led to a quiet Q4 2019, 350 $7.0
Euronext (Paris)
with four IPOs raising a total of US$555m. 300 $6.0
Deutsche Health care TeamViewer
• The Middle East and Africa regions end the year on 250 $5.0
Börse (Main GmbH
a high note with Saudi Arabia’s launch of blockbuster 26 IPOs Verallia SA
200 $4.0
and Scale) $2.2b
IPO Saudi Aramco in Q4 2019. These two regions $1.3b $1.1b
150 $3.0
$4.0b Technology
launched 23 IPOs raising US$28.3b in total in 2019. 100 $2.0
4 IPOs Deutsche Börse Materials
Euronext (Paris)
• In India, deal numbers and proceeds are down in 50 $1.0
2019 from 2018 due to a decline in economic 0 $0.0
2015 2016 2017 2018 2019
growth. India posted 62 IPOs and raised US$2.5b. Number of IPOs Proceeds US$b
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 December 2019. Transaction size is estimated using the mid-point of the proposed price range (for IPOs that has not been priced by end of 4 December). For stock exchanges ranking, expected proceeds are based on the
mid-point
All of the
values are US$proposed price range.
unless otherwise All values
noted. are and
Q4 2019 US$Q4
unless otherwise
19 refer to thenoted.
fourthQ4 2019ofand
quarter Q4 and
2019 19 refer
covertopriced
the fourth
IPOs quarter of 20192019
from 1 October and cover priced IPOs2019
to 4 December fromplus
1 October 2019
expected toby
IPOs 4 December
the end of 2019 plus expected IPOs by the end of December. 2019 refers to the full year of 2019 and
December. Global IPO trends: Q4 2019 | Page 23
cover2019
YTD priced IPOs
and from
2019 1 January
refers 2019
to the full to of
year 4 December 2019 priced
2019 and cover plus expected
IPOs fromIPOs by the end
1 January of December.
2019 Data as
to 4 December of 4plus
2019 December 2019.
expected IPOs by the end of December. Data as of 4 December 2019.Europe, Middle East, India and Africa IPO market insight
Trends
Cross-border activity 2019 Transaction sizes 2019
Main markets Junior markets
EMEIA issuers’
2019 Change on 2018 2019 Change on 2018
cross-border activity
Percentage of all EMEIA issuers Median post-
$216m 9% $14m 19%
25
IPO market cap
11%
8% 8%
9% 10%
Cross-border IPOs
Median
deal size $58m 31% $3m 3%
10% of all EMEIA issuers* listed abroad
$400
Trends $20
$300
2015 2016 2017 2018 2019 Median post-IPO
market cap US$m $200 $10
Outbound 17
Median deal size $100
US$m
In EMEIA main markets, $0
2015 2016 2017 2018 2019
$0
2015 2016 2017 2018 2019
7% of all EMEIA issuers* listed outside EMEIA IPOs
single-digit first-day
returns and double-digit Sources of IPOs
post-IPO performance in
Inbound
Percentage Percentage of IPOs
2019
2019 YTD should give a of proceeds
0 25% 79% 83% 87% 90% 89%
boost to investor 0% of cross-border IPOs globally** listed Percentage 9%
2%
on EMEIA exchanges which came from of IPOs
sentiment going into IPO
outside the region 4%
2020. 89% 1%
2%
71% 2% 3% 2%
20% 15% 11% 7% 9%
2015 2016 2017 2018 2019
PE- and/or VC-backed Former state-owned enterprises Non-financial sponsor-backed
*There were 251 IPOs by EMEIA issuers in 2019. This analysis is based on the listed company domicile.
** There were 89 cross-border IPOs globally in 2019. All amounts in table are in US$. Figures may not total 100% due to rounding.
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 24
YTD 2019 and 2019 refers to the full year of 2019 and cover priced IPOs from 1 January 2019 to 4 December 2019 plus expected IPOs by the end of December. Data as of 4 December 2019.Europe, Middle East, India and Africa IPO market insight
Performance
IPO pricing and performance 2019 Equity indices 2019 Volatility indices
First-day
Share price BSE CAC 40 DAX 30 Euro VSTOXX® VDAX®
performance
average return
since IPO
SENSEX +24.0% +24.5% STOXX 50 15.2 16.0
+13.2% France Germany +20.9% index level index level
India Europe -36.2% -31.5%
Main
markets +6.5% +16.8% YTD
-3.8%
YTD
-0.4%
FTSE 100 JSE All Share MICEX Tadawul
Q3 2019 Q3 2019
+6.8% +4.9% +23.0% All Share
Junior
markets +1.8% +3.1% UK South Africa Russian Federation +0.6%
Saudi Arabia
-- indicates a decrease in volatility as at 4 December 2019 compared with 28 December
2018 for year-to-date (YTD) and 30 September 2019 for end of Q3 2019. Whereas +
+ or – indicates change compared with offer price at IPO + or – indicates change since 28 December 2018 indicates an increase in volatility over the same time period.
Outlook
• As we head into 2020, a US presidential election year, we Aramco IPO, geopolitical uncertainties and economic key African markets, we expect African IPO activity to
expect geopolitical and trade tensions to fade. We also challenges continued to impact investor confidence in the remain quiet heading into the first half of 2020.
expect to see a resolution to Brexit in Q1 2020. With these region in 2019. IPO activity is expected to pick up in 2020, • Following the stumbles of a few high-profile IPOs in 2019,
uncertainties dissipating, we anticipate a much improved due to the MSCI and FTSE inclusions, privatization drives and largely because they missed the timing to demonstrate value
IPO market for 2020. government initiatives from GCC countries and Egypt, as creation, we expect unicorns to come to market earlier in
• In Europe, a de-escalation of geopolitical and trade well as a healthy IPO pipeline within MENA countries. their growth trajectory. Technology and health care are
issues, greater certainty around Brexit, and the year end • In India, the government’s reduction of corporate effective anticipated to continue to be the big players in EMEIA IPO
rally of major equity indices should support European tax rates for domestic companies (which would boost markets in 2020.
IPO activity in the first half of 2020. company earnings), combined with record highs in the • Although many clouds of uncertainty are expected to clear
• In the UK, the outcome of the December general election equity markets and positive returns from companies newly in 2020, investors will be more selective in their choice of
will determine IPO activity levels in 2020. We anticipate an listed in 2019, contribute to a positive outlook for IPO IPOs. IPO candidates need to prepare early and have a
IPO window to open probably in February 2020. activities in the Indian market in 2020. holistic approach to getting ready so that they can catch the
• In Middle East and North Africa (MENA), until the Saudi • Given the ongoing political and economic instability in many right timing when the narrow IPO window opens.
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 25
YTD 2019 and 2019 refers to the full year of 2019 and cover priced IPOs from 1 January 2019 to 4 December 2019 plus expected IPOs by the end of December. Data as of 4 December 2019.Europe IPO snapshot
Markets All amounts in table are in US$
Activity 2019 Trends 2019
All amounts in table are in US$
Change on Change on Q4 Sectors Transaction sizes
2019 2018 Q4 2019 2018
by number of IPOs Main markets Change on 2018 Junior markets Change on 2018
143 37% 40 38% Technology
43 IPOs | $9.4b
Median post-IPO market cap $214.0m 8% $22.5m 22%
IPOs IPOs
Median deal size $58m 33% $6.0m 4%
$23.3b 39%
$5.9b 41% Health care
18 IPOs | $1.0b
proceeds proceeds *There were 150 IPOs by European issuers in 2019. This analysis is based on the
Industrials Cross-border IPOs: top IPO issuers listed company domicile, regardless of the listed company exchange.
13% of IPOs are financial 15% of IPOs are financial 17 IPOs | $3.5b
** There were 89 cross-border IPOs globally in 2019.
sponsor-backed sponsor-backed
Cross-border Outbound Inbound
IPOs
largest by proceeds
10% of all Europe
issuers* listed
15 7% of all Europe
issuers* listed
10 3% of cross-border IPOs globally**
listed on European exchanges but
3
abroad IPOs outside Europe IPOs came from outside Europe IPOs
Main markets Junior markets Nexi SpA
2019 Change on
2018
2019 Change on
2018
$2.3b Technology, Borsa Italiana
61 82
TeamViewer GmbH
44% 32% $2.2b Technology, Deutsche Börse Performance 2019
IPOs IPOs
Française des Jeux SA
$21.4b 39% $1.9b 31% $2.0b Media and entertainment, Euronext
(Paris)
Equity indices Volatility index IPO pricing and
proceeds proceeds performance
160 $6
Stock exchanges CAC 40 DAX 30 VSTOXX®
160 $70 First-day average return
by total proceeds
140 $60
140
$5 +24.0% +24.5% -36.2% | 15.2 index level
120
$50
120
$4 London (Main and AIM) France Germany YTD Main markets +5.4%
100
100
$40 80 $3
$5.8b | 21 IPOs UK Junior markets +1.8%
80
$30 Deutsche Börse (Main and
Euro FTSE 100
60
60
$20 40
$2
Scale) VDAX® Share price performance since IPO
40
20 $10
20
$1
$4.0b | 4 IPOs Germany STOXX 50 +6.7% -31.5% | 16.0 index level Main markets +14.0%
0 $0
0 $0
+20.9% UK YTD
2015 2016 2017 2018 2019
2015 2016 2017 2018 2019
Euronext and Alternext Europe Junior markets +3.3%
Number of IPOs Proceeds US$b $3.3b | 9 IPOs France, Belgium - indicates a decrease in volatility as at
4 December 2019 compared with + or – indicates change compared with offer
All amounts in table are in US$ + or – indicates change since 29 December 2018 29 December 2018 for year-to-date (YTD). price at IPO
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 26
YTD 2019 and 2019 refers to the full year of 2019 and cover priced IPOs from 1 January 2019 to 4 December 2019 plus expected IPOs by the end of December. Data as of 4 December 2019.EMEIA — UK IPO market insight
2020 would hopefully bring greater
clarity on Brexit and more
activity to UK IPO market
Global IPO trends: Q4 2019 | Page 27EMEIA — UK IPO market insight
Highlights from the market 2019 activity
All amounts in table are in US$
Change on 2018
• The UK general election (on 12 December) and the ongoing
Brexit process led to a quiet Q4 2019, with four IPOs raising
21 IPOs 57% Sectors IPOs
by number of IPOs largest by proceeds
proceeds of US$555m. In 2019, London Main Market and $5.8b proceeds 28%
Alternative Investment Market (AIM) launched 21 IPOs for Technology Network International Holdings plc
an aggregate proceeds of US$5.8b. This is the lowest level 29% of IPOs are financial sponsor-backed 20% 7 IPOs | $3.6b $1.6b Technology, London Main, UAE
80 $16
of IPO activity in the UK since 2009 (8 IPOs, US$1.3b). 70 $14 Financials Trainline plc
4 IPOs | $260m $1.4b Technology, London Main, UK
• Domestic and to some extent inbound IPO candidates 60 $12 London Main Market
$5.2b Consumer products Airtel Africa plc
remain in a holding pattern to see which way election results 50 $10
$687m Telecommunications, London Main, UK
40 $8 12 IPOs 3 IPOs | $153m
and Brexit negotiations go. However, there is clear 30 $6
Telecommunications Finablr plc
evidence of activity in the pipeline, with issuers 20 $4 London AIM $394m Technology, London Main, UAE
2 IPOs | $1.1b
continuing to prepare for H1 2020 deals. 10 $2 $534m
Retail Helios Towers plc
0 $0 9 IPOs
Outlook
2015 2016 2017 2018 2019 2 IPOs | $413m $365m Telecommunications, London Main, UAE
Number of IPOs Proceeds US$b
• The outcome of the UK general election will determine All amounts in table are in US$
how active IPO markets will be in 2020 and until there is Trends Performance 2019
clarity post-election around Brexit, IPO candidates 2019 Change on 2018
should multitrack by having a Plan B to help support Median deal size $108m 156% IPO pricing and performance
their business strategy. Once there is more clarity, there
Median post-IPO First-day Share price performance since
can be a rush of IPOs coming to market. Thus, companies $183m 77% UK average return IPO (aka offer-to-current)
will need to be well-prepared and ready to go. market cap markets
• Given some of the recent challenges faced by high-profile
Median post-IPO market cap is calculated for IPOs that were priced by 5 December.
+ or – indicates +3.2% +15.2%
change compared First-day and current average returns are mean returns of issuers who started
IPOs at home and abroad, discerning investors will be Cross-border IPOs: top countries/regions of origin 2019 with offer price at IPO trading by 4 December.
leaning more toward traditional, easier-to-understand Equity indices
businesses, which will place increasing pressure on United Arab Emirates 3 IPOs ($2.4b)
unicorn companies. This may create greater challenges
for companies with more novel business models looking 3 FTSE 100
+6.8%
FTSE 350
+8.6%
FTSE AIM
All-share
to come to the public market. IPOs +6.7%
+ or – indicates change since 28 December 2018 Current index level is for 4 December 2019
All values are US$ unless otherwise noted. Q4 2019 and Q4 19 refer to the fourth quarter of 2019 and cover priced IPOs from 1 October 2019 to 4 December 2019 plus expected IPOs by the end of December. Global IPO trends: Q4 2019 | Page 28
YTD 2019 and 2019 refers to the full year of 2019 and cover priced IPOs from 1 January 2019 to 4 December 2019 plus expected IPOs by the end of December. Data as of 4 December 2019.You can also read
